Excelsior Correspondent
HARIDWAR, July 1: The Board of Patanjali Foods Limited (PFL) has approved the proposal of Patanjali Ayurved Limited (PAL) to acquire its Home and Personal Care (HPC) business.
The HPC business of PAL currently has strong brand equity in India’s FMCG space and enjoys a loyal consumer base across the country. It presently caters to key segments like dental care, skin care, home care and hair care.
PFL prepares to acquire the entire HPC business of PAL ongoing concern basis and includes all the assets and liabilities attributable to the business, relevant employees, distribution network, contracts, licenses, permits, consents and approvals integral to this operation.
PFL and PAL have also agreed to enter into a licensing agreement to use the trademarks and associated intellectual property rights owned by PAL that relate to the product portfolio of the HPC business.
The transfer of the HPC business has been mutually negotiated between PFL and PAL (basis valuation exercises conducted by independent evaluators) for a lump sum consideration of Rs. 1100 crore which shall be subject to customary closing date adjustments and on such other terms as set out in the business transfer agreement to be executed between PFL and PAL.
Separately, a 20-year licensing arrangement for a 3 per cent turnover based fee along with other conditions has been agreed between PFL and PAL.
The acquisition will bring along with it multiple key synergies in terms of brand equity and enhancements, product innovations, cost optimisation, infrastructure and operational efficiencies and positive impact on market share.
With this acquisition, the PFL 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.
Pursuant to the approval of the Board of PFL, it shall now take necessary steps to execute the definite agreements in connection with the acquisition as well as apply for necessary approvals integral to the transaction.
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