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Godrej Consumer sells UK unit to PE firm for $44 mn

Godrej Consumer Products Ltd has sold its UK business to a European private equity firm, ending the chapter on what was its first overseas acquisition 13 years ago as it sharpens its focus on emerging economies.

The Indian company said in a stock-exchange filing on Friday it sold unit Godrej Consumer Products UK Ltd to London-based JZ International for £34 million (about $44 million or Rs 313 crore). The sale is effective immediately.

Godrej Consumer executive chairperson Nisaba Godrej said the decision is guided by the company’s “3 by 3 approach”, which focuses on three categories—home care, hair care and personal care—in three regions—Asia, Africa and Latin America.

Nisaba Godrej, daughter of group patriarch Adi Godrej, said the company is building on its presence in these emerging markets and sharpening its strategic focus. “This [sale] is in line with our long-term objective of continually optimising our portfolio and making the appropriate capital allocation choices to drive superior value creation,” said Nisaba, who took over as the company’s chairperson last year.

Martin Wright, senior partner at JZ International, said the PE firm aims to continue growing the business both organically in the UK and overseas and through acquisition.

JZ International has offices in Madrid and Amsterdam, apart from London. Since its founding in 2000, the firm has made more than 30 investments in its core sectors throughout Europe, including the UK, Spain, Italy, Scandinavia, Germany, Holland and Portugal.

Godrej Consumer had bought Keyline Brands Ltd in the UK in 2005 to expand its international footprint and later renamed the target company. Godrej UK owns personal care brands Touch of Silver, Cuticura and Soft & Gentle, which it bought in 2013 from Colgate-Palmolive.

However, most of Godrej Consumer’s overseas acquisitions have been in emerging economies such as Indonesia, South Africa, Nigeria and Kenya.

The maker of Cinthol soap and Good Knight mosquito repellent had acquired a 51% stake in Darling Group Holdings, which operates across sub-Saharan Africa, in 2011. In February 2016, it signed a pact with Darling Group to hike its stake in its two units in South Africa and Mozambique to 90%.

In 2012, it bought a 60% stake in Chilean hair colour cosmetics company Cosmetica Nacional. It purchased the remaining 40% in the Chilean company in 2015. In December last year, it acquired the 49% stake it didn’t already own in Kenya-based Charm Industries.

The sale of the UK unit is the second divestment by Godrej Consumer this year. It had sold its local diaper brand Snuggy to Nobel Hygiene Pvt. Ltd in July.

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