The board of Hindustan Unilever Ltd has agreed to merge with the maker of malted milk drink, GlaxoSmithKline Consumer Healthcare India Ltd, the company said in an exchange filing. This will expand the largest consumer goods maker in the country's portfolio by adding the nutrition business. The deal is worth £3.1 billion.

Shareholders of HUL will get 4.39 shares for every one share held in GSK Consumer Healthcare. The total business of GSK Consumer Healthcare was valued at Rs 31,700 crore for the transaction. GSK will receive approximately 5.7 percent stake in HUL and HUL's holding in GSK's Indian unit would drop by 5.3 percent to 61.9 percent.

"Following completion of the transaction, currently expected by the end of 2019, GSK intends to sell down its holding in HUL. Such sell down will be in tranches and at such times as GSK considers appropriate, taking into account market conditions," GSK said in its exchange filing.

In March 2018, the nutrition drink maker reported a flat revenue growth of Rs 4,377 crore and most of it came from its sales of Horlicks and Boost.

In a statement HUL said that it will be the nutritional drink category is still under-penetrated in India and it is well-positioned with its reach and capabilities to develop it.

HUL's share price surged as much as 4.68 percent to Rs 1,838.30 a piece, its new 52-week high.