A Decade Of Give & Take For Both

Mumbai, January 22: | Updated: Jan 23 2003, 05:30am hrs
Between the Tatas and Hindustan Lever Ltd (HLL), the Indian subsidiary of Anglo-Dutch consumer products giant Unilever, its been a history of business deals. Starting with the mega merger of erstwhile Tata company Tata Oil Mills Company Ltd (Tomco) with HLL, to the proposed merger of Hind Lever Chemicals with Tata Chemicals, the two conglomerates have completed four deals over the last decade.

Interestingly, however, this time it is HLL which is giving up a non-core business to the Tatas. The previous three deals involved the multinational taking over, or merging, a Tata business with itself. The Tomco merger with HLL, effective April 1, 1993, was one of the most talked about and visible events of Indian corporate history. The merger brought to its fold a host of toilet soap and hair oil brands. In 1995, HLL which, by this time was known for its aggressive growth strategy through the M&A route and yet another Tata company, Lakme Ltd, formed a 50:50 joint venture called Lakme Lever Ltd. This was to market Lakmes market-leading cosmetics, which had established an undisputed leadership position in the Indian market. In 1998, Lakme sold its brands to HLL and also divested its 50 per cent stake in the joint venture. With this, the Tatas exited from a non-core business, while Levers position got further strengthened.

Completing ten years of this Tata-Lever affiliation comes the announcement to merge Hind Lever Chemicals with Tata Chemicals, a core Tata group company, albeit this time it is the Tatas portfolio which gets bloated. A lot has got to do with HLLs concern about the culture and environment its employees would go into, comment sources.

Sources say that feelers on the possible Tata Chem-Hind Lever Chem alliance had started to pour in ever since the time Keki Dadiseth was the chairman of HLL, and ex-Leverite R Gopalakrishnan had joined the Tata Group. Not surprisingly, Mr Dadiseth, who currently heads Unilevers home and personal care business, also joined the board of Indian Hotels Company, a Tata group company.

Notwithstanding the give-and-take between the Tatas and HLL, both on assets and personnel fronts, the two compete aggressively on several fronts be it tea, coffee or salt. In fact, with reports of Tata Chem planning to enter sectors like atta, rice, dal, HLL would have to cook enough strategies internally to take on the Tatas on this front. Or do we smell an alliance here too