Nusli Wadia, the feisty chairman of Bombay Dyeing and Britannia, must be a pleased man. It now looks as if Wadia could well end up acquiring the 25.1 per cent stake held by his estranged French joint venture partner Danone in Britannia Industries for a song. Media reports have suggested that Danone's holding could be acquired by the Wadias at a discount. Britannia's market capitalisation stands at approximately Rs 3,750 crore; Danone's 25.1 per cent holding is, therefore, worth around Rs 940 crore. A buyout of that stake will give Wadia over a 50 per cent holding in Britannia.
Danone, on its part, has been extremely keen on a presence in the Indian market and following this deal, is expected to go on its own. The tricky part is the No Objection Certificate that the Wadias will need to give Danone to allow the French major to go solo in India. There are other outstanding issues as well-most notably Britannia's demand that Danone pay it royalty for using the Tiger brand in foreign markets; it will be interesting to watch how the entire battle is finally resolved. Wadia, who has acquired a well-deserved reputation of being an extremely tough negotiator, must have obviously driven a hard bargain.
This is not the first time that the boss of Bombay Dyeing-who's Mohammad Ali Jinnah's grandson and the scion of one of India's most aristocratic industrial families-is in the news over a scrap. In the '80s, he fought a famous, and bruising, battle with Reliance Chairman Dhirubhai Ambani. That one ended in truce-perhaps the only occasion when these two titans did not decisively win a battle they had entered. Then, a few years ago, Wadia was again in the news when Kolkata jute baron Arun Bajoria tried to corner shares in his flagship Bombay Dyeing, which has underperformed its peers by a wide margin. Details of how that corporate battle concluded remain blurred, but in the end Bajoria was forced to back down and reportedly sold his Bombay Dyeing shares at a loss.
Wadia, who leaves the day-to-day operations of his empire to his sons, Jeh and Ness, has recently diversified into the aviation industry (GoAir) and is trying to monetise his massive real estate holdings in and around Mumbai. The fate of these ventures will determine the future of his group.