After acquiring 14.9% stake in Henkel India from Tamil Nadu Petro Products in March, Jyothy Laboratories (JLL) is close to buying out German consumer products company Henkel?s 50.97% stake in Henkel India. The deal is pegged at R800 crore. On Thursday, JLL’s board approved a proposal to acquire 50.97 % in Henkel , and an announcement is expected soon.
When contacted by FE, MP Ramachandran, chairman & managing director, JLL, confirmed that the deal with Henkel for a majority stake is being finalised. Regarding funding the deal, he said, R200 crore would be raised through internal accruals. ?As for the rest, we are taking the debt route to raise R600 crore in the first three months. After that, we will be partnering with PE investors.We are already in talks with some PE players in India.?
To raise money for its Henkel India buy out, the company has taken a loan of R600 crore from Kotak Mahindra Bank. Shares of JLL were up 7% to close at R222.05 on the BSE on Thursday.
Last year, Henkel India had a net sales of R450.17 crore, while its cosmetics business had a revenue of R182.62 crore during the period. The rest of its businesses comes from detergents and cleansers. Henkel India’s major FMCG brands include, Henko range of detergents, Pril utensil cleansers, Margo toilet soaps, Neem toothpaste and Fa range of toilet soaps and deodorants.
According to Ramachandran, there’s a strong synergy between the two companies? product offerings in India. ?With this move, we would like to increase our stake further as we want to strengthen our presence both in both rural and urban India,? he added.
JLL had revenues to the tune of R581.6 crore in FY2009-10.