Emami to acquire Kesh King for Rs 1,651 crore, shares plunge

Emami Ltd shares tanked over 5.5 per cent after the company announced that it has entered into an agreement with Sanjeev Juneja to acquire his hair and scalp care business under 'Kesh King' and allied brands.

The acquisition marks Emami's foray in the Ayurvedic Hair & Scalp Care segment.

The acquisition will be funded by a judicious mix of surplus funds, short term and long term debt. The process is expected to be completed in a month's time.

The transaction envisages transfer of the business as going concern on a slump sale basis and will include brand portfolio of ayurvedic medicinal oil, herbal shampoo & conditioner and ayurvedic capsules along with its respective formulation and all related assets, rights and liabilities including working capital for a total consideration of Rs 1,651 crore.

In a filing on the Bombay Stock Exchange, Harsha V Agarwal, director, Emami said: "The acquisition is a part of our aggressive growth strategy and marks our foray into the Ayurvedic Hair & Scalp care segment. We plan to leverage the target business with our existing strength to make our presence stronger and deeper. The transaction is a perfect strategic fit for Emami."

The company's current oil portfolio includes Navratna Cool Oil and Emami 7 Oils in One Damage Control Hair Oil in the light hair oil segment.

Shares of Emami closed at Rs 1,066.15- down 5.80 per cent against the previous close of Rs 1,131.80.