HUL sells Pureit business to US geyser major AO Smith

MUMBAI: HUL is selling its water purification business to US-based water technology company AO Smith‘s Indian arm for an enterprise value of Rs 601 crore ($72 million).
The move comes as the FMCG major looks to sharpen its focus on core categories, HUL said in a statement on Monday. It is also aligned with parent Unilever‘s decision to sell the broader Pureit business to AO Smith.Pureit sells a range of water purifiers across India, Sri Lanka, Bangladesh, Vietnam and Mexico, among others.

HUL had first launched Pureit in Chennai in 2004 before introducing it nationally in 2008. The business, which is housed under HUL’s home care business, posted a turnover of Rs 293 crore in FY24 – less than 1% of the company’s total turnover.
The transaction will be undertaken by way of a slump sale and there will be no change in the shareholding pattern of HUL following the sale, which is expected to be completed in three months, the company said. “This move is in line with our strategic intent to focus sharply on core categories. Pureit provides essential water purification solutions to millions of loyal customers, and I am confident the brand will thrive further under the ownership of AO Smith,” said Rohit Jawa, CEO and MD at HUL. CFO Ritesh Tiwari said that the deal unlocks a “good value” for the business. HUL will continue to manage the business until the completion of the transaction.
Analysts tracking the FMCG space said that the deal is a positive development for HUL, given that the water purification business is hypercompetitive and very different from a typical FMCG business.