Campaign India Team
Feb 16, 2012

Marico to acquire Paras Pharma business from Reckitt Benckiser

The current acquisition would involve brands namely Set Wet, Livon, Zatak, among a few others from the personal care stable of Paras Pharmaceuticals business which was acquired by Reckitt Benckiser around April last year

Marico to acquire Paras Pharma business from Reckitt Benckiser

Marico has executed documents to acquire Set Wet, Livon, Zatak and certain other personal care brands currently owned by Reckitt Benckiser. Reckitt Benckiser had acquired these brands from Paras Pharmaceuticals in a deal completed during April 2011.

According to a media statement, the transaction envisages transfer of all key assets including intellectual property rights, supply agreements and third party manufacturing agreements (Paras personal care business), for an undisclosed consideration. These assets are in the process of being transferred to a separate company in which Marico will acquire 100% shares. The closing of the transaction is scheduled to take place over the next few months.

"The Paras personal care business is expected to achieve a turnover of over Rs 150 crore during FY12. Brands in the portfolio are amongst the top three positions in the hair gels, male deodorant and leave-on hair serum categories. This acquisition gives Marico an opportunity to participate in the rapidly growing deodorant and male grooming categories in India. The portfolio addresses the grooming needs of the youth and is supported by India’s demographic profile. Marico will also leverage its distribution strength in India to provide a fillip to the growth of the brands. The acquisition of this business is expected to further reduce Marico’s dependence on edibles oils and hair oils."

Saugata Gupta, chief executive officer, consumer products business, Marico, said “I am excited about this acquisition. It fast-forwards our journey towards creating a portfolio for the future with a significant presence in the male grooming and post wash hair care segments.”

Milind Sarwate, group chief financial officer, chief human resources officer, Marico, stated, “This strategic acquisition is a significant building block for value creation for Marico shareholders through profitable sustainable growth over the long term. We will fund the acquisition through a judicious mix of internal accruals, equity and debt."

While the current creative agency handling Paras Pharma's personal care business, under Reckitt Benckiser, is Euro RSCG India; Marico's brands are spread across two other agencies, namely BBH India and McCann Erickson.

Any changes in the respective ad agencies, for the existing and newly acquired brands, has not been announced so far.  

Source:
Campaign India

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