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By Adi Narayan
Unilever Plc (ULVR), the world’s second- largest consumer goods company, will spend up to 292.2 billion rupees ($5.4 billion) to boost its stake in its Indian unit to help offset slower European growth.
Unilever will pay 600 rupees a share in an open offer to raise its stake in Hindustan Unilever Ltd. (HUVR) to 75 percent from the current 52.48 percent, it said in a statement today. The price is 21 percent higher than the stock’s closing price of 497.35 rupees yesterday. The Anglo-Dutch company is seeking greater control of the Indian business after this month reporting the slowest quarterly growth in two years as consumer confidence slumped inEurope. Hindustan Unilever yesterday reported a 15 percent jump in fourth-quarter earnings, beating analyst expectations on lower raw material costs.
Unilever Plc (ULVR), the world’s second- largest consumer goods company, will spend up to 292.2 billion rupees ($5.4 billion) to boost its stake in its Indian unit to help offset slower European growth.
Unilever will pay 600 rupees a share in an open offer to raise its stake in Hindustan Unilever Ltd. (HUVR) to 75 percent from the current 52.48 percent, it said in a statement today. The price is 21 percent higher than the stock’s closing price of 497.35 rupees yesterday. The Anglo-Dutch company is seeking greater control of the Indian business after this month reporting the slowest quarterly growth in two years as consumer confidence slumped inEurope. Hindustan Unilever yesterday reported a 15 percent jump in fourth-quarter earnings, beating analyst expectations on lower raw material costs.
“They may consider that the valuations are cheap compared to what it will be in five or 10 years,” Sachin Bobade, analyst at Brics Securities Ltd., said via telephone from his office in Mumbai. “It’s a solid cash business, and the growth is steady.”
Hindustan Unilever surged as much as 20 percent to 597 rupees before trading at 587.25 rupees at 9:28 a.m. in Mumbai trading today.
Hindustan Unilever has grown revenue by expanding in rural areas and marketing pricier facewashes and hair conditioners. The Anglo-Dutch company said it is making the offer for 487 million shares of the Indian company.
To contact the reporter on this story: Adi Narayan in Mumbai at anarayan8@bloomberg.net
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