Unilever has raised its stake in Indian subsidiary Hindustan Unilever but fallen short of the 75% threshold it had originally targeted.
The maker of Persil, Bovril and Marmite has been looking to increase its influence at the division for some time and therefore boost returns from one of the world’s fastest growing economies.
Shareholders in Hindustan Unilever, which include Aberdeen Asset Management, tendered some 319 million shares — taking Unilever’s stake to 67% from 52.4%. The consumer goods giant paid about 600 rupees per share, valuing the transaction at just over £2 billion.
Hindustan Unilever can trace its roots back more than a century when British soap maker Lever & Co entered the market. The unit is now Unilever’s third largest division and accounts for about 8% of its sales, analysts said.
Experts said they were not surprised that Unilever had failed to get the 75% it had hoped for. Jon Cox, analyst at Kepler Capital Markets, said: “The potential of India’s consumerville is rightly regarded as huge and Hindustan Unilever is the de facto play in the space. Foreign investors would rather stay invested.”
Unilever has played down suggestions that it will try to buyout all investors in the Indian business. Shares in the company rose 13p to 2754p.
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies