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Steer Engineering moves Delhi HC against GSK Consumer over Unilever deal

Aashish Aryan/New Delhi 08 Dec 18 | 05:16 PM


A cloud of litigation hangs over the recent deal which saw Unilever acquire GlaxoSmithKline's Indian consumer business, including Horlicks and Boost. 

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Bengaluru-based Steer Engineering has moved the Delhi High Court seeking protection of the technology and know-how that it provided to GSK Consumer Healthcare in India. 

The technology is used for the manufacture of food and malt-based drinks such as Horlicks and Boost. 

In its petition, Steer Engineering said it had signed a contract with GSK Consumer that involved scaling up of the ‘Two Twin Extrusion Process’, being employed by the consumer division of the British major. The firm had set up a pilot manufacturing facility on the premises of one of GSK Consumer’s manufacturing agents, for the scaling up of the technology. 

Following the GSK-Unilever deal, Steer is apprehensive that the technology it developed, along with advancements made in optimal measurements of temperature of the product, the feed rate of solids, and enzymes, among other parameters, could all be transferred to Hindustan Unilever (HUL) — which it claims is against the terms of the contract. 

According to the terms, Steer will not only provide hardware, but also the technology and know-how involved in the process. 

The company will, however, be entitled to protect its technology and intellectual property if GSK were to transfer it to a third party, the company said in its petition.

ALSO READ: GSK's health food drink Boost may get a brand refresh under new owner HUL

“There are some bits of the technology that would be transferred to GSK once the contract is over. But the bulk of it would remain with Steer Engineering," said Essenese Obhan, managing partner at Obhan and Associates, and the advocate for Steer Engineering.

The ‘Two Twin Extrusion Process’ enables continuous production of homogeneous and finely structured products, using bio-sourced or synthetic raw inputs.

ALSO READ: HUL presents good opportunity to GSK shareholders; to add value in long run

Hearing Steer’s petition, the court on Friday asked GSK Consumer to file an affidavit detailing whether the said technology, related hardware and related know-how is actually being transferred to HUL, as claimed by the petitioner. 

“It has been made clear that if there is any such move, status quo will be maintained till further orders of the court," a single judge bench of Justice Rajiv Shakdher said. The court will next hear the matter on January 23. 

Unilever had, on December 3, agreed to buy GSK’s nutrition business and merge it with HUL in a $3.8-billion deal.

Bone of Contention


Steer has set up a facility for GSK Consumer's manufacturing agentSays unit used technology  for 'Two Twin Extrusion Process'The process is used in manufacture of HorlicksFirm apprehensive of GSK transferring intellectual rights to HULCourt has ordered status quo if transfer is actually happening

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