Patanjali Foods to acquire Patanjali Ayurved's home, personal care biz for Rs 1,100 crore

Patanajali Foods on Monday said its board approved the proposal to buy its parent company Patanjali Ayurved's home and personal care business for a lump sum valuation of Rs 1,100 crore.

"The board of Patanjali Foods Ltd has approved the proposal of Patanjali Ayurved Ltd's to acquire its Home and Personal Care Business, accelerating the company's transition into a leading FMCG company. The HPC business of PAL currently has a strong brand equity in India's FMCG space and enjoys a loyal consumer base across the country. It presently caters to four key segments, being (i) dental care, (ii) skin care, (iii) home care, and (iv) hair care," the company stated in an exchange filing.

"The transfer has been mutually negotiated for a lump sum consideration of Rs 1,100 crore, which shall be subject to customary closing date adjustments and on such other terms as set out in the business transfer agreement," it also said.

Separately, a 20-year licensing arrangement for a 3 per cent turnover based fee along with other conditions has been agreed between the company and Patanjali Ayurved, the company added.

"The acquisition will lead to a consolidation of 'Patanjali' brand FMCG products portfolio. 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," it mentioned.

With this acquisition, the company also informed that it has reaffirmed its position to be a strong FMCG company in its journey towards becoming a major player in the FMCG space as committed to its shareholders at the time of its maiden FPO, it further stated.

The development came post-market hours today. Earlier in the day, Patanjali Foods shares jumped 6.81 per cent to settle at Rs 1,699.65.