GSK minority shareholders must read fine print of merger with HUL: Experts

The all-equity merger of Hindustan Unilever Ltd with GSK Consumer Healthcare India appears tax neutral, say experts.

On the face of it, the all-equity merger of Hindustan Unilever Ltd (HUL) with the publicly-listed GSK Consumer Healthcare India is tax neutral, with no incidence of tax in India.

However, tax experts noted that the merger in all likelihood would lead to a difference in value of tangible assets of the merging company and the value of shares issued by HUL. This difference will be treated as value of goodwill and other intangible assets.

Tax experts said HUL could claim depreciation on goodwill for tax purpose. This follows a Supreme Court order in 2012 that held that companies are