The race for GlaxoSmithKline Plc’s Indian Horlicks nutrition business is nearly over and one of two European consumer giants, Unilever Plc and Nestle SA, is likely to be the winner, media reports indicate.

The auction for the assets, including popular malt-based health drinks brands Horlicks and Boost, could fetch more than $4 billion, sources told Reuters previously. GSK owns a 72.5 per cent stake in the business, GlaxoSmithKline Consumer Healthcare Ltd.

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GSK is in exclusive talks with Unilever to strengthen its position in India, its most important emerging market, the Financial Times reported on Tuesday citing people familiar with the sales process.

News reports suggest Nestle is interested in buying Horlicks.

A spokeswoman for GSK India told Reuters on Wednesday that the company is conducting a strategic review of its nutrition brands in India and expects to conclude the process by 2018.

Valuations steep, say analysts

If either of these two companies win the auction, that would mean they beat out Coca-Cola, another likely suitor who has been looking to expand in emerging markets as growth in the United States slows.

Coca-Cola was shortlisted to join the final round of the auction, which began in September, but its interest cooled, FT reported, citing one person familiar with the sales process.

The $4 billion valuation is considered too steep by some analysts as the Indian market for so-called health drinks - mostly dietary supplements or flavour enhancers typically drunk with milk - is seeing a sharp slowdown in growth.

Horlicks is still very popular and comfortably dominates the health-drinks market in India, but urban Indian consumers are increasingly turning to healthier, less-sugary alternatives and natural products.

Last month Kraft Heinz agreed to sell its popular health-drink brands Complan and Glucon-D, along with a couple of other brands and factories, to Zydus Wellness Ltd for Rs 4,595 crore ($648.6 million).

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A spokesman for Nestle India told Reuters on Wednesday that the company would not comment on speculation. A spokeswoman for Unilever said the company would get back on the Reuters query seeking comment about the media articles.

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