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MUMBAI: Anglo-Dutch food giant Unilever on Tuesday announced an offer to buy another 22.5 percent of its partially-owned Indian subsidiary Hindustan Unilever (HUL) in a proposed deal worth 293 billion rupees ($5.4 billion).
The offer, which saw HUL shares surge 20 percent, is part of Unilever's plan to increase its presence in emerging markets such as India, where HUL's products such as skin fairness cream "Fair and Lovely" and Lux soaps are best-sellers.
Unilever's stake in HUL will rise from the existing 52.5 percent to 75 percent if shareholders take up the offer for 487 million shares, which would start in June.
Unilever has proposed paying 600 rupees per share, a premium of 20.6 percent to HUL's Monday closing price of 497 rupees at the stock markets.
"This represents a further step in Unilever's strategy to invest in emerging markets," said Paul Polman, Unilever's chief executive, in a statement.
Polman said the "long heritage" and the "significant" growth potential of India's economy make it a long-term priority for the group.
On Monday, HUL reported a surprise 14.7 percent rise in net profit for the January-March quarter to 7.87 billion rupees ($145 million) in the three months to March, from 6.86 billion rupees a year earlier.
Expectations had been for a profit of 7.5 billion rupees.
As well as making top brands in the consumer products market, HUL has a huge distribution network stretching across thousands of supermarkets and small retailers in India.
Its sales are watched by analysts as a barometer of Indian consumer demand. (AFP)
