Mumbai: Marico Ltd. has announced that it is acquiring Hindustan Lever Limited Nihar brand of coconut oil and perfumed hair oils. Nihar has a current annualised turnover of about Rs120 crore from these two products.
The transaction envisages a transfer of the IPR and other rights associated with the brand in India and other parts of the world where the product is available. HLL will continue to operate brands other than Nihar in the value added hair oil segment.
Marico and HLL announced this through a joint press communiqué today. HLL had initiated the divestment as a part of its brand rationalisation programme. The process involved competitive bidding amongst select FMCG companies.
According to M K Sharma, vice chairman, HLL, "This is in line with our Portfolio rationalisation strategy, while at the same time creating value for our shareholders."
Ambit Corporate Finance acted as Marico's advisors in this transaction
Nihar Naturals' Jasmine and Rose-perfumed hair oils are the national market leaders in perfumed coconut oils, with significant presence in the east, while in the coconut oil segment Nihar''s regional strengths will complement Marico''s presence in the Rs800 crore category.
For Marico Nihar's strengths in the east, especially its distribution network in Bihar and Jharkhand will provide Marico a platform to launch its other brands and also enable Marico to drive cost advantages.
This is Marico's first over Rs100-crore acquisition. "Nihar elegantly complements Marico's strengths in both coconut oil and perfumed hair oils, said Harsh Mariwala, in a press communiqué. "We see significant scope for value creation leveraging Nihar's equity. This will help us top up our healthy organic growth, as we move towards our target of reaching a Rs2,000 crore turnover over the next three years."
Marico operates in the personal care, wellness and processed edible oils categories in India and abroad and has a portfolio of 15 brands. Its annualised global turnover is Rs1140 crore (Approximately $260 million).