Godrej Consumer Products to acquire Indonesian company Megasari
04 January 2010
Godrej Consumer Products Ltd (GCPL) is close to striking a deal estimated at Rs1,200-1,400 crore for the acquisition of Indonesian household products company Megasari.
The company has put in an "attractive" bid for the global pesticides business of Sara Lee Corp, with which it has a joint venture in India, according to persons close to the developments.
GCPL, which makes Cinthol soap and Colour Soft hair colour, would fund the Indonesian acquisition through a combination of internal accruals and debt, but the South-East Asian company would be run by its household insecticides joint venture Godrej Sara Lee.
The Godrej group is expected to acquire the US-based Sara Lee's 51 per cent stake in the joint venture in March or April. Sara Lee's brands include Good Knight mosquito repellents, Kiwi shoe care products and the Brylcream hair grooming range.
GCPL's foray into international acquisitions has recently received board endorsement, which cleared its Rs3,000 crore proposal.
According to A Mahendran, director of the group's fast moving consumer products (FMCG) business and managing director of Godrej Sara Lee, Godrej was looking at inorganic growth for its FMCG portfolio but declined to comment on the Megasari deal.
With a portfolio comprising HIT insecticide, Stella air freshener and instant foods, Megasari grosses over Rs600 crore in annual sales.
Bids for the American company's global pesticides business have been invited by Goldman Sachs. The pesticides business is estimated to be worth $350-400 million. Among companies that have shown interest are Reckitt Benckiser and SC Johnson. Sara Lee plans to exit its personal and home care businesses to focus on foods.