Horizontal Integration - Unilever pursues £50bn-plus mega-merger

There's a mega-merger on the cards with Unilever eyeing up GlaxoSmithKline's healthcare and consumer goods arm, adding Sensodyne toothpaste, Panadol and Centrum vitamins to its portfolio.

And indeed, the company is explicit about the motive for this sizeable horizontal merger: "The acquisition would create scale and a growth platform for the combined portfolio in the US, China and India, with further opportunities in other emerging markets," Unilever said, pointing to synergies in the oral care and vitamin supplements business."

According to Reuters, "Dove soap maker Unilever defended its approach for the consumer healthcare arm of GSK, saying the business was a ‘strong strategic fit’ in line with its plan to expand in the health, beauty and hygiene categories."

What seems to be emerging is a dual process of Unilever divesting (selling-off) some of their slower growing brands to release funds for more ambitious takeover targets.