Baba Ramdev's company Patanjali Ayurveda has decided to sell its household and personal care business to listed group company Patanjali Foods Limited for Rs 1,100 crore. This deal includes products like hair care, skin care, dental care and home care.
A big update has come out regarding Baba Ramdev's Patanjali. In fact, Baba Ramdev-led Patanjali Ayurveda has decided to sell its household and personal care business to listed group company Patanjali Foods Limited for Rs 1,100 crore. The board of Patanjali Foods Limited has approved the proposal to acquire the 'Home and Personal Care' (HPC) business of Patanjali Ayurveda Limited. This will accelerate the company's transformation into a leading FMCG company.
There are crores of consumers across the country
PAL Home Personal Care business currently has a strong brand equity in India's FMCG space and millions of consumers across the country. The HPC business currently comprises four key segments - Dental Care, Skin Care, Home Care and Hair Care. This strategic move to acquire the HPC business will strengthen the company's existing FMCG product portfolio with a range of iconic brands and will also contribute to revenue and EBITDA growth.
This is the plan
PFL is set to acquire the entire HPC business of PAL. This includes all assets and liabilities relating to the business, associated employees, distributor network, contracts, licenses, permits, consents and approvals required for this operation. The acquisition is subject to the fulfillment of various conditions precedent which are primarily the regulatory approvals required for the transfer of the business undertaking.
Further, the Company acknowledges the value of the intellectual rights of the product portfolio of the HPC business and its market significance. Accordingly, the Company and PAL have also agreed to enter into a licensing agreement, which allows the Company to use the trademarks and related intellectual property rights owned by PAL. These relate to the product portfolio of the HPC business.
This is the deal amount for business transfer
A lump sum amount of Rs 11,00,00,00,000 has been mutually negotiated between the Company and PAL (based on due diligence conducted by independent evaluators) for transfer of HPC business. A separate licensing arrangement has been agreed between the Company and PAL for 3% turnover based fee along with other terms and conditions.
How did it become a big player in the FMCG sector
With this acquisition, the company also stated that it has reaffirmed its position as a strong FMCG company in its journey to become a leading player in the FMCG sector, as committed to its shareholders at the time of its first FPO.
Pursuant to the approval of the Board of PFL, the Company will now take the necessary steps to execute definitive agreements in respect of the acquisition as well as apply for the necessary approvals for the transaction.
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