HUL stock gains 1.5% after Pureit sale to AO Smith for ₹601 crore

HUL approved the sale of its water purification business to AO Smith India for an Enterprise Value of ₹601 crore ($72 million). This strategic move is aimed at allowing the company to concentrate on its core categories.

The water purification business operated under the brand 'Pureit', and the transaction was executed on a slump sale basis, as disclosed by Hindustan Unilever in an exchange filing on July 15.

HUL has been divesting non-core brands recently to sharpen its focus on core areas. Last year, it sold Annapurna and Captain Cook.

“This move is in line with our strategic intent to focus sharply on our core categories. Pureit provides essential water purification solutions to millions of loyal consumers, and I am confident the brand will thrive further under the ownership of A. O. Smith,” Rohit Jawa, CEO & Managing Director of HUL, said.

“We believe the addition of Pureit will strengthen our leadership position as a global supplier of premium water treatment products and will double our market penetration in South Asia. The acquisition will also support our corporate strategy by enhancing our premium product portfolio and distribution capabilities,” said Kevin J Wheeler, chairman and CEO of AO Smith Corp.

Parag Kulkarni, president of AO Smith India Water Products, said, “The Pureit brand, known for innovative water purification products, strong brand recognition and dedication to customer service, complements AO Smith’s geographic and channel presence. The Pureit team’s deep understanding of consumer needs and water treatment expertise adds tremendous strength to AO Smith in India, and we look forward to welcoming the Pureit team to the A. O. Smith family.”

HUL Stock Performance

HUL shares have underperformed over the last year, falling over 2% as against a 25% rise in the Nifty 50. At the current market price of ₹2644.4 per share, the company’s market capitalisation stands at ₹6.21 lakh crore. The stock touched a 52-week high of ₹2,723.9 on June 5, 2024, and a 52-week low of ₹2,170.25 on April 16, 2024.