ITC pulls out of Horlicks, Complan acquisition race, says valuations too high
Diversified conglomerate indicates it would venture into the health food segment and build its own brand.
September 30, 2018 / 03:10 PM IST
ITC | Supratim Dutta is appointed as the Chief Financial Officer of the company. (Image: Reuters)
ITC has reportedly withdrawn from the race to acquire nutritional drink market brands Horlicks and Complan as it considers the valuations of the brands too high, according to a Times of India report.
The diversified conglomerate believes that the brands do not fit its portfolio. However, the company indicated that it would venture into the health food segment and build its own brand.
Moneycontrol could not independently verify the report.
ITC had earlier shown interest in GlaxoSmithKline (GSK)-owned Horlicks and Kraft Heinz-owned Complan.
Hemant Malik, divisional chief executive of ITC Foods, told the newspaper, "These were opportunities that just came up in the last few months. We evaluated and looked at some of these valuations and found the cost of acquisition to be very high. Given the high FMCG (Fast-Moving Consumer Goods) valuations in India, such acquisitions could be a challenge. In this context, we are not pursuing it."
In July, ITC had said it is open to acquisition of the Horlicks brand when it is put up for sale, provided the price is "right".
According to reports, the Horlicks acquisition received attention from Coca-Cola, Kellogg’s, Nestle, Pepsi, Reckitt Benckiser and Unilever.
Besides ITC, Wipro Consumer Care and Lighting, and Cadila Healthcare are preparing to buy Kraft Heinz India’s nutritional drink.
Complan accounts for approximately 8 percent share of the Rs 5,500 crore nutritional drink market in India.
Besides Complan and Horlicks, the market is dominated by Cadbury’s Bournvita and Nestle’s Boost.