Introduction

Patanjali Foods Ltd will acquire the home and personal care division of Baba Ramdev-led Patanjali Ayurved for ₹1,100 crore. The acquisition represents a related party transaction conducted at fair value and on an arms’ length basis. Notably, Patanjali Ayurved Ltd (PAL) is one of the promoters of Patanjali Foods.

Acquisition

In a regulatory filing, Patanjali Foods stated that they 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 transaction is contingent upon clearance from lenders, shareholders, and other relevant parties. The Competition Commission of India must grant the corporation approval.

Official Statement

The business stated that it would pay the seller ₹1,100 crores in instalments as payment for the transaction. According to CEO Sanjeev Asthana, Patanjali Foods will pay the whole amount in five instalments and will finance the transaction with cash on hand.

He stated that the deal would be finalized this quarter. Additionally, the corporation plans to purchase well-known brands including Kesh and Dant Kanti.

“The turnover of the business which we have acquired was around ₹2,800 crore last fiscal year,” he said.

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.

Source: Economic Times