Godrej Consumer Products Ltd on Friday said it has inked a pact with private equity firm Creador to divest its non-core food business in Indonesia for an undisclosed amount.
The transaction is expected to close in about two months, Godrej Consumer Products Ltd (GCPL) said in a statement.
“Our decision to divest the foods business is very much in line with our strategic intent to focus on home and personal care,” GCPL Chairman Adi Godrej said.
The divestiture of this business would improve the margin profile of our Indonesian business and help the team to take the household and personal care platforms to their full potential, he added.
“The consideration from this divestiture will further strengthen our balance sheet,” Godrej said.
The company's foods business in Indonesia includes cereals, snacks and instant food products under largely the brands Simba and Turbo.
“This acquisition demonstrates our commitment to making growth investments in Indonesia, and reflects our strong capabilities in both Indonesia and India,” Creador Founder and CEO Brahmal Vasudevan said.
Creador is a private equity firm focused on long-term investments in growth-oriented businesses in Indonesia, India and Malaysia.
Under the agreement with Creador, Godrej's Indonesian subsidiary will continue to distribute the brands for a two-year period, GCPL said.
Last year the company's food business in Indonesia generated net sales of about $22 million. GCPL had acquired the business in 2010.
Godrej Indonesian Business COO Naveen Gupta said this divestment will now enable the company to focus on its key brands - Hit, Stella and Mitu and further Accelerate their growth trajectory.
Shares of GCPL today closed at Rs 723 on the BSE, up 0.10 per cent from their previous close.