Reckitt Benckiser to hike stake in healthcare arm

23 January 2014

Reckitt Benckiser India plans to buy around 26 per cent stake in group firm Reckitt Benckiser Healthcare for Rs725 crore, as part of a move to integrate its healthcare, personal care and home-care businesses.

Reckitt Benckiser India, the Indian arm of British household goods firm Reckitt Benckiser, bought Ahmedabad-based Paras Pharmaceuticals and its brands, including Moov pain reliever and anti-cold D'Cold, for Rs3,260 crore in 2010.

This acquisition enabled Reckitt India to double the revenue share of healthcare business to about 20 per cent.

Reckitt Benckiser, maker of Dettol antiseptic and Harpic toilet cleaners, will buy the shares from group company Reckitt Benckiser Singapore, which bought Paras Pharma for Rs3,260 crore in 2010, the company said in a resolution filed with the Registrar of Companies last week.

"The company has adequate internal accruals to meet the proposal for the said investment," it said.

Reckitt Benckiser, which banks on its over-the-counter products India that include brands Disprin and Strepsils throat lozenges, recently rolled out Gaviscon antacid and test-launched Mucinex cough syrup in the country.

Reckitt India is increasingly integrating its operations with the erstwhile Paras Pharma unit and selling its non-personal care portfolio with brands such as Livon hair tonic, Borosoft antiseptic cream and Set Wet to oil maker Marico.

Reckitt India had in 2012, too, made similar transaction to acquire around 26 per cent stake in the healthcare firm for Rs725 crore.

Reckitt, and its other foreign peers like Unilever are competing for a larger share of the Indian FMCG market and are making huge investments to increase stakes in their Indian units or acquiring Indian companies.

While Unilever spent Rs19,180 crore to increase its stake in Hindustan Unilever (See:Unilever pumps $3.2 bn into market to hike HUL stake to 67%) , GlaxoSmithKline hiked its stake in its consumer healthcare arm for Rs4,800 crore (Glaxo announces open offer to hike stake in Indian arm).

Beverages giant Pepsi-Co, too, recently announced setting up the company's biggest beverages plant in Andhra Pradesh for Rs1,200 crore as part of its Rs33,000-crore investment plan in the country by 2020.

Reckitt Benckiser has clocked average annual growth of over 20 per cent in India in the last few years.

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