The Emami Group has acquired a 27.5 per cent stake in ayurvedic products firm Zandu Pharmaceutical Works Ltd. In the process, Emami bought out the entire stake of the Vaidya family, one of the two promoter groups in Zandu.
Emami started the acquisition with a 3.9 per cent buy from the market. Then on 28 May, it bought another 14.81 per cent shares, followed by an additional 12.7 per cent on 30 May from one of the existing promoters.
According to market sources, Emami paid a price of over Rs8,000 per share of Zandu of face value Rs100 each.
Under the Securities and Exchange Board of India take-over regulations, Emami is required to make an offer for a minimum 20 per cent additional sake in Zandu.
Emami, which is looking for more buy-outs, is expected to make an open offer for the entire stake in Zandu Pharmaceuticals.
Emami will fund the buyout through internal accruals.
Zandu's turnover was Rs 150 crore in the last financial year.
The personal care products firm is also looking at buyouts in the international markets as well.
Zandu is a strong brand with products such as Zandu Balm, Zandu Special Chyawanprash, Kesri Jeevan while Emami's products include the Himani range brands such as Fair & Handsome cream and Navratna oil.
The Rs1,600 crore Emami Group is present in niche segments where there is less competition from the multinational giants. The group is also present in segments such as paper and newsprint, ball pen tips, hospital, bio diesel, edible oil, cement, real estate and retail.
It has recently floated a 100 per cent subsidiary called Emami Realty Pvt Ltd for its real estate plans.