Rajesh Jain, Independent Market Strategist feels that one should play Hindustan Unilever (HUL) solo rather than try and buy it.
Jain told CNBC TV18, "I would skip buying this stock, because the immediate gains to Hindustan Unilever (HUL) if at all the merger goes through, would only be from the absence of the cut throat price activity and competition in the shampoos and the detergent space, but if you were to just sit back and think on the feasibility of such a move, there are extreme difficulties first of all it is a multinational acquiring a multinational. So essentially mergers and acquisitions (M&A) activity overseas doesn't translate itself into a geography like India that is the first problem, the second issue is Proctor & Gamble with the watches of 38 billion pounds out to acquire Unilever which is dual listing of 60 billion pounds and 70 billion Euros in Amsterdam and London looks a little infeasible at this point and finally like we have said what are the business synergies exploited across product segments, even that is not very clear, because the two are huge behemoths that operate in very distinct products and product segments across the board."
He further added, "The synergies may not be translated in India and we already have a case study in point with Proctor & Gamble and Gillette . Gillette as a stand alone operation continues to perform outstandingly in India but that is because of the success of its marketing forays. I think a similar thing would apply to Hindustan Unilever (HUL) and to that extent I think you should play it solo rather than try and buy it expecting pop on this global M&A news."
