Even as Dabur dropped its $250-million acquisition plan of Malaysian consumer goods company Unza due to risk factors, two other Indian players Godrej and Emami are considering bidding for the company.
While Dabur group director PD Narang declined to comment, Godrej Consumer Products executive director and president Hoshedar Press said, “I cannot confirm or deny the move. We keep talking to several companies for potential acquisitions.” But Kolkata-based Emami Group, another keen contender for Unza was more forthcoming. Emami Group director Aditya Agarwal confirmed the move and said, “We are interested in Unza and in talks with them.” Dabur had been close to acquiring a controlling stake in Unza but talks with PE funds had to be suspended because of resistance from the company’s management. Apparently, the management wanted Actis and StanChart to sell their respective stakes to PE funds and not to a strategic investor. The two funds agreed to its condition but couldn’t find a suitable PE partner. Consequently, the two have now decided to put their 60% stake on auction and learnt to have invited bids.
Indian FMCG companies have shown interest for Unza for several reasons. Companies such as Dabur, Marico, Godrej Consumer and Emami believe that overseas buyouts will give them a foothold in foreign markets and be a key driver of their globalisation strategy. It can also act as a derisking strategy against a downturn in the domestic business. For instance, Indian FMCG company Marico’s international business has over the years grown more than 35%. The company acquired soap brands in Bangladesh—Camelia and Aromatic—which have a 1.5% market share in the country. It has helped Marico enter a category through existing brands and allows it to learn about a new segment. Recently, it bought post-wash hair care brands Fiancee and Haircode in Egypt and looking for more such acquisitions in Africa.
(Source: Economic Times)
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