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Hindustan Unilever Divests Pureit Water Business to A. O. Smith for ₹601 Cr

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Synopsis:

HUL divests its Pureit water purification business to A. O. Smith for ₹601 crore. The move aligns with HUL's strategic focus on core categories. The transaction is expected to enhance A. O. Smith's market presence and product offerings in India.

Hindustan Unilever News Today

Hindustan Unilever share price to remain in focus as the FMCG major announced that its board approved the sale and divestment of its water purification business, Pureit, to A. O. Smith India Water Products Private Ltd for ₹601 crore ($72 million).

Transaction Details

The water purification business, part of HUL's Home Care segment, generated a turnover of ₹293 crore in the financial year 2023-24, representing less than 1% of HUL's total turnover. The sale will include trademarks, copyrights, intellectual properties, and identified assets and contracts associated with Pureit.

Strategic Focus

Rohit Jawa, CEO and Managing Director of HUL, stated that this divestment aligns with HUL’s strategic intent to focus on its core categories. He expressed confidence in Pureit's continued success under A. O. Smith's ownership.

Explore: Hindustan Unilever Ltd. Share Price

A. O. Smith’s Expansion

A. O. Smith India Water Products, a subsidiary of the US-based A. O. Smith Corporation, sees the acquisition as a significant boost to its market presence in India. Parag Kulkarni, President of A. O. Smith India Water Products, highlighted Pureit's strong brand recognition and dedication to customer service as key complements to A. O. Smith’s geographic and channel presence.

Market Perspective

According to analysts, the deal is marginally positive for HUL. The water purification business is hyper-competitive and more aligned with consumer durables than typical FMCG products and poses challenges in product differentiation and pricing. The sale supports HUL’s strategic focus on its core categories.

Financial Impact and Future Management

HUL’s shareholding pattern will remain unaffected by this transaction, and the company will continue to manage the water purification business until the transaction is completed.

Market Reaction

Following the announcement on Monday, Hindustan Unilever share price ended at ₹2,618.90, down by ₹3.50, or 0.13%, on the BSE.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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