After Glaxo's plan to sell Horlicks brand, Kraft weighs sale of Complan
21 June 2018
Kraft Heinz Co is considering a sale of its milk drink brand Complan in India amidst falling sales and the emergence of newer food drinks in the market amidst a slump in the health drinks market.
Kraft Heinz is currently working with an adviser to gauge interest in the business, reports quoting sources close to the development said. A sale of the Complan brand is expected to fetch at least $1 billion for the global foods giant, according to people familiar with the matter.
Reports say local companies and private equity firms might be interested in a global brand. They also cited Bloomberg data on the growing number of consumer brand acquisitions in India, that have more than doubled this year to $7.7 billion.
But, for the health drink brands, growth has been slowing. That saw Glaxo putting its prime health drink brand for sale in March.
Speculation about a possible sale of the Complan brand was rife when Horlicks was on put on sale by GlaxoSmithKline Plc in March. In fact, Complan sales have deteriorated more than that of Horlicks.
While the competition earlier was among the three brands – Complan, Horlicks and Bournvita – the competition is wider now with the market adding newer brand, including local ones.
In 2017, Kraft had reported a $49 million impairment due to continued decline in its nutritional beverages business in India. GSK also had reported competitive pressure on Horlicks.
Against the asking price of $1 billion for Complan, Gloaxo expects Horlicks to fetch a minimum of 42.9 billion. The question is whether the falling brands will get a buyer in India?