New Delhi [India], July 1 : The board of Patanjali Foods Limited on Monday said it has approved the proposal of Patanjali Ayurved Limited to acquire its home and personal care (HPC) business.
This, it believes, will accelerate the company's transition into a leading FMCG company.
The home and personal care business of Patanjali Ayurved currently has a strong brand equity in India's FMCG space and enjoys a loyal consumer base across the country.
It presently caters to four key segments dental care, skin care, home care, and hair care.
As per a company release, this strategic initiative for acquisition of home and personal care business shall strengthen the company's existing FMCG product portfolio with an array of marquee brands and also contribute to the growth in terms of revenue and EBITDA.
As per the release, Patanjali Foods prepares to acquire the entire home and personal care business of Patanjali Ayurved on a going concern basis, and includes all the assets and liabilities attributable to the business, relevant employees, distribution network, contracts, licenses, permits, consents, and approvals integral to this operation (hereafter referred to as the "Business Undertaking").
The release stated that the closing of the acquisition is subject to the fulfilment of various conditions precedent which are largely regulatory approvals required for the transfer of the Business Undertaking.
Accordingly, they have also agreed to enter into a licensing agreement permitting to use the trademarks and associated intellectual property rights, owned by Patanjali Ayuved, that relate to the product portfolio of the home and personal care business.
The transfer of the HPC business has been mutually negotiated between the company and PAL (basis valuation exercises conducted by independent valuers) for a lump sum consideration of Rs 1,100 crore, which shall be subject to customary closing date adjustments and on such other terms as set out in the business transfer agreement to be executed between the Company and PAL.
"The acquisition will lead to a consolidation of 'Patanjali' brand FMCG products portfolio. The acquisition will bring along with it multiple key synergies in terms of brand equity and enhancements, product innovations, cost optimisation, infrastructure and operational efficiencies and positive impact on market share," the release added.
Incorporated in 1986, Patanjali Foods Limited (formerly known as Ruchi Soya Industries Limited) is one of India's top FMCG players in India. The company is present in Edible Oils, Food and FMCG and Wind Power Generation segments via a bouquet of brands like Patanjali, Ruchi Gold, Nutrela, etc.
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