The board of Patanjali Foods has approved a plan by Patanjali Ayurved to acquire its personal care and home business, therefore paving the way for strong positioning of Patanjali Foods as one of the leading FMCG firms in the country.
Patanjali Ayurved’s HPC division caters to a loyal customer base spread all over India and is an established business with high brand equity in the categories of home care, hair care, skin care, and dental care. The Acquisition will bring in brands to the FMCG product portfolio of Patanjali Foods and help drive sales and EBITDA.
The transaction involves the acquisition of all assets, liabilities, employees, distribution network, contracts, and approvals of HPC’s business. The deal will be consummated only after getting necessary regulatory approvals. Apart from a licence agreement for continuing to use trademarks and intellectual property of Patanjali Ayuved, the contract provides for a lump sum consideration of Rs 1,100 crore.
The consolidation of Patanjali’s FMCG products portfolio will probably realize synergies in terms of infrastructure, operational effectiveness, cost efficiency, product innovation, and market share. With trademarks like Patanjali and Ruchi Gold, Patanjali Foods, formerly Ruchi Soya Industries, is a participant in the Indian FMCG market. It is also engaged in food and edible oil refining, besides wind power.
