MUMBAI: HUL has signed an agreement to acquire intimate hygiene brand VWash from Glenmark Pharmaceuticals. The deal includes acquisition of intellectual property rights including trademarks, design and know-how related to the VWash brand. The consideration has been split into two parts involving an upfront cash payment upon closing of the deal and a deferred consideration over three years. No manufacturing facility is being acquired. Glenmark will continue to manage the business until the transaction is completed, and will also continue to manufacture for HUL for an agreed period of time.
Given current challenges faced due to the spread of coronavirus, HUL is hopeful of closing this deal in the next couple of months.
VWash, which was launched in 2013, is a leading player with no sizable competitor in the female intimate hygiene category. tnn In a teleconference, Srinivas Phatak, CFO, HUL, said female intimate hygiene fits in well with the company’s growth plans in new spaces in beauty and hygiene category. “Intimate hygiene is a niche consumer need with a large potential to grow and lead market development. As India becomes more affluent, the category is poised to grow. HUL understands consumers and liquid categories well,” said Phatak.
The urban penetration of the category is currently low at less than 8%, but the brand VWash is said to have a high recall. “We will drive penetration of the category by utilizing our distribution muscle and the chemist channel which came into our fold with the GSK Consumer Healthcare merger,” said Phatak.
Commenting on the proposed acquisition, Sanjiv Mehta, CMD of HUL, said, “The brand has a leadership position and fits well into the white spaces in our beauty & personal care business. We look forward to completing the acquisition and strongly believe HUL is well positioned to further scale up this business, given the strength of our market development and distribution capabilities”.
There are four pillars to HUL’s beauty and personal care growth strategy and these include, its core categories, premiumisation, market development and targeting white spaces. The channels the company would push its beauty and personal care products include modern trade, ecommerce and the beauty channel.
Abneesh Roy of Edelweiss Securities said, “HUL is clearly on its path to fill its whitecaps through inorganic acquisitions. This acquisition also helps them premiums their beauty and personal care portfolio.”
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