BS REPORTER
Mumbai, 30 May
Emami, the Rs 600 crore FMCG company has bought 27.5 per cent stake in Zandu Pharmaceutical Works, a many decade-old ayurvedic and herbal health care products company.
Further, Emami plans to make an open offer to buy another 20 per cent stake in the company, as per the regulations.
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Emami has bought 24 per cent from one of the existing promoters' group and this is a strategic investment with an objective to be part of management control along with the existing prompter, said the company release.
The deal size has not been disclosed. Company said the deal would be completed with internal resources.
"Zandu has a tremendous business potential which can be exploited with strong marketing, research and development and other operating efficiencies coupled with long term entrepreneurial vision. Emami with its strong marketing acumen and operational efficiency can help Zandu reap its true potential. There is strong synergy between the business of Emami and Zandu. If Emami and Zandu's respective expertise are combined, it can reach to greater heights", said Harsha V Agarwal, director, Emami.
Zandu is a many decade old ayurvedic herbal and healthcare products company and owns renowned brands like Zandu Balm, Zandu Special Chyawanprash, Kesri Jeevan and other ayurvedic and ethical products. Zandu has a turnover of over Rs 150 crore with net profit of over Rs 15 crore. Its Zandu balm commands over 45 per cent market share and Chyawanprash enjoys around 10 per cent market share.
In recent years this is the first ever deal of purchasing sizable stake in FMCG sector by Emami. After exploring for few months Emami management has decided to go for the deal with its own resource. Emami is on a look out for further acquisition opportunities nationally and internationally and walk the path of inorganic growth, said the release.
The Rs 1600 crore Emami group has business interests in paper and newsprint, ball pen tips, hospital, bio diesel, edible oil, cement, real estate and retail.