News: ‘HUL is ready to welcome GSK’s great talent into their family’


‘HUL is ready to welcome GSK’s great talent into their family’

An INR 31,700 crore merger deal between GSK and HUL will not only combine the businesses of the two companies but also their capabilities.
‘HUL is ready to welcome GSK’s great talent into their family’

An INR 31,700 crore all-stock acquisition, a five-year contract to distribute GSK Consumer’s over-the-counter and oral health products and a strategic move by HUL to foray into the health and wellness space, the HUL-GSK merger stands for a lot of things. But an important element that gets ignored is the synergy of talent that both the brands could benefit from. 

HUL has been able to establish itself as one of the biggest FMCG business in the country with a demonstrated track record of delivering growth which is competitive, profitable, sustainable and responsible. Its business has delivered growth of 10 percent CAGR in the last 10 years with EBIT improvement of 530bps. But who has been driving this growth? It's the talent right from the R&D team who ideates and develops the products to the sales team who has given HUL the status of massive distributors in this space. 

Similarly, GSK is known for its iconic brands like Horlicks and Boost. But there goes an entire team who ensures the unique features of the brands and makes it one of the largest product in the market for health food drinks in India. 

The HUL-GSK merger will hence not only combine the businesses of the two companies but also their capabilities. As Sanjiv Mehta, Chairman and Managing Director, HUL shared that they have very carefully examined GSK’s strengths, the claims that they will be able to make, the nutritional properties in the brand, the product, he also indirectly acknowledges the people capabilities of the company. Even in his press note where he talks about the merger and HUL’s expansion plan he also mentions HUL’s zest to work with the GSK team. 

“With this proposed strategic merger with GSK CH India, we will be expanding our portfolio with great brands into a new category catering to the nutritional needs of our consumers. We look forward to welcoming new brands and great talent into the Unilever and HUL family, once the transaction is complete,” said Sanjiv Mehta, Chairman and Managing Director, HUL. 

The merger is subject to approvals from statutory authorities and shareholders and once the transaction is officially complete the transition will start taking shape. 

In the history of mergers and acquisitions, the talent often suffers. From major restructurings, layoffs to dealing with the change in culture and values, there are a lot of challenges that employees have to go through.

Shekhar Purohit, MD, First Mumbai Consulting reiterates the same and says, "A merger is often followed by talent rationalizing. Given that HUL is well known for its distribution across India and for its leading practices across functional areas such as finance, and HR, I anticipate talent rationalization in sales, HR, and finance. As this is not a merger of equals (HUL is purchasing GSK), we can anticipate most of the rationalizing happening in GSK."

In this scenario, how will HUL build an effective onboarding process for GSK’s employees and how will GSK ensure a smooth transition for their employees is to watch out for. 

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Topics: #MergersAndAcquisitions, C-Suite

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