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Jul 02, 2024 08:45 AM IST
The acquisition is subject to approval of shareholders, lenders and other approvals. The company will have to get approval from Competition Commission of India.
Patanjali Foods Ltd will acquire Baba Ramdev-led Patanjali Ayurved’s home and personal care business for ₹1,100 crore. Patanjali Ayurved Ltd (PAL) is one of the promoters of Patanjali Foods and the acquisition falls under related party transactions being undertaken on a fair value and arms’ length basis.
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In a regulator filing, Patanjali Foods said that the board has approved the “acquisition of the entire non-food business undertaking i.e. hair care, skin care, dental care and home care carried out by PAL, including but not limited to all movable assets, immovable properties, contracts, licenses, books and records, employees and certain assumed liabilities of PAL through a slump sale arrangement on a going concern basis”.
The acquisition is subject to the approval of shareholders, lenders and other necessary approvals. The company will have to get approval from the Competition Commission of India.
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“The consideration for the acquisition shall be ₹1,100 crore, payable by the company to the seller in tranches,” the company said. Patanjali Foods will pay the entire amount in five tranches, its CEO Sanjeev Asthana said adding that the company would fund this deal through internal cash reserves.
The deal is expected to be concluded in the current quarter, he said. The company will also acquire major brands like Dant Kanti and Kesh Kanti.
“The turnover of the business which we have acquired was around ₹2,800 crore last fiscal year,” he said.
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In the filing, Patanjali Foods said, “The transfer of the home and personal care business has been mutually negotiated between the company and Patanjali Ayurved (basis valuation exercises conducted by independent valuers) for a lump sum consideration of ₹1,100 crore only”.
“The acquisition will bring along with it multiple key synergies in terms of brand equity and enhancements, product innovations, cost optimisation, infrastructure & operational efficiencies and positive impact on market share,” the company said.
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