Hindustan Unilever Limited (HUL) on Monday said it has agreed to buy intimate hygiene wash brand VWash from Glenmark Pharmaceuticals for an undisclosed amount, marking its entry into the segment.
The Mumbai-headquartered company said it will make an upfront cash payment upon closing the deal and pay royalty on sales for three years. The deal is subject to certain conditions, which both the companies will be working to fulfill in the next few months, HUL said in a statement. Glenmark will continue to manage the business until the transaction is completed, and will also continue to manufacture for HUL for an agreed period of time.
“The brand has a leadership position and fits well into the white spaces in our Beauty and Personal Care business. We look forward to completing the acquisition and strongly believe HUL is well positioned to further scale up this business, given the strength of our market development and distribution capabilities,” said Sanjiv Mehta, chairman and managing director of HUL. The company said the acquisition is in line with its intent to enter fast-growing segments of the future in the beauty and personal care category.
Awareness about feminine hygiene is growing in India and a number of startups and new players are expanding the market. Category penetration stands at about 8% in urban India, but HUL sees a strong double digit growth in the market, it said in an investor presentation.
Meanwhile, Glenmark says the decision to divest in VWash is driven by the strategy to focus on its core therapy areas.
“While Glenmark has been able to establish VWash as a category leader, we are confident that HUL’s strong market presence and large distribution network will accelerate future growth of VWash,” said Sujesh Vasudevan, president, India Formulations, Middle East and Africa, Glenmark.
The deal includes acquisition of intellectual property rights including trademarks, design and know-how related to the VWash brand, which was launched by Glenmark in 2013. Glenmark said no employees will be transferred as a part of this agreement and the transaction will be closed in the next few months.