India's Godrej to buy Raymond's consumer business for $345 million
By M. Sriram
MUMBAI (Reuters) -India's Godrej Consumer Products Ltd said on Thursday it is acquiring the consumer goods business of Raymond Consumer Care Ltd for $345 million, bolstering its portfolio of brands in the country's fast-growing retail market.
Raymond Ltd will sell its popular brands such as the Park Avenue deodorant and Kamasutra condoms to Godrej as part of the deal, which will turn it debt-free and reduce the number of business lines, its chairman Gautam Singhania said in a press conference.
The deal comes amid growing competition in India's nearly $900 billion retail market, where Godrej competes with everyone from Reliance Inustries to Unilever and Procter & Gamble .
Meanwhile, Raymond will retain its condom factory to do contract manufacturing for domestic and international markets, though it's not clear what it will make there. Godrej's existing portfolio includes brands like Cinthol soaps and Good Knight mosquito repellent.
"This acquisition allows us to complement our business portfolio and growth strategy with under-penetrated categories that offer a long runway of growth," said Sudhir Sitapati, managing director and chief executive of Godrej Consumer.
Shares of Godrej Consumer closed 2.3% lower ahead of the announcement, while Raymond rose 6.4%.
Raymond's core business will now be real estate, along with its investments in engineering and denim, the company said.
The deal will lead to Raymond Lifestyle - currently an unlisted entity - becoming a listed company in the next 12-14 months, the company added.
"We have demerged our business, which investors have been asking for. We are net-debt free," Singhania said.
(Reporting by Biplob Kumar Das in Bengaluru and M. Sriram in Mumbai; Editing by Aditya Kalra and Varun H K)