Zandu Pharmaceutical Works Ltd (“Zandu”), their Promoters and Emami Ltd (“Emami”) are pleased to announce that they have entered into an Share Purchase Agreement for certain shares owned by the existing promoter group of Zandu, the Parikh family, to Emami. As a result of this agreement, Emami has purchased an additional 18.18 percent of Zandu and will become its largest shareholder, and this transaction effectively paves the way for Emami’s acquisition of Zandu. The consideration received by the Parikh family is Rs.15, 000 per share and a non-compete fee of Rs. 22 cr.
Commenting on the transaction, Mr. Harsh V Agarwal, Director of Emami said “We are excited to unite our people, brands and processes with Zandu and complete this transaction, especially at a time when panic and pessimism in the global financial markets have forced our competitors to act defensively. We view this transaction as an important step in the growth of Emami and believe that Zandu’s product line will provide us with opportunities in markets in India and across the world. The marriage of Zandu and Emami will change the landscape of the consumer products sector in India.”
The Managing Director of Zandu, Mr. Girish G Parikh, added “I am happy with the arrangement and feel confident that the shareholders of both companies will derive maximum benefit from this consolidation. As both companies have much in common relating to innovative product development based on the holistic healing system of ayurveda, I am certain that this transaction will lead to further enhancement of operational efficiency and will significantly contribute to the growth of Zandu and Emami. Since both companies have a rich heritage and experience, by joining hands they will now be better poised to exploit the emerging opportunities”.
Consumers across India will benefit from both companies’ strong brand recognition, powerful distribution channels and efficient supply-chain management and marketing strategies. This transaction is expected to be earnings accretive to Emami’s shareholders in the long term, given potential synergies in revenues as well as in selling, general and administrative expenses. Emami stands committed in upholding Zandu’s brand equity, business ethics and corporate philosophy. Furthermore, both Emami and Zandu enjoy a commonality of cultural, ethical values and product development.
Anand Rathi Financial Services Ltd acted as exclusive financial advisor to Emami on this transaction. Antique Financial Services Ltd. acted as financial advisor to the Parikh Family.
Kanga & Co acted as legal advisors for the Emami group and the Parikh family was represented by AZB & Partners
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About Emami
The Rs 600 cr Emami Group is one of the leading Indian Groups in personal and healthcare products industry. Established in 1974 Emami manufactures and markets trusted power brands like Boroplus, Navratna, Fair and Handsome, Sona Chandi, Mentho Plus, and Himani Fast Relief. Emami’s brands and their extensions occupy leadership in most of the categories like antiseptic creams, cool oils and pain relief ointments and it has been a pioneer in introducing the first fairness cream for men in the world. Maintaining a CAGR of 25% Emami has footprints in 60 countries across the globe spanning over Middle East, Europe, Africa, CIS and the SAARC. The plants and production activities of the Group are currently in West Bengal, Pondicherry, Assam, Gujarat, Orissa, Uttaranchal, and Himachal Pradesh. Today, advancing with increased momentum, Emami is a coveted Rs 1600 crore Group. In East India Emami occupies leadership in sectors such as newsprint, private hospital, edible oil, bio-diesel and real estate. Emami also has presence in ball pen tips manufacturing, contemporary art and retail chain with Frank Ross and Starmark The group has signed a memorandum of understanding (MoU) for setting up a cement plant at Chattisgarh.
Visit www.emamigroup.com for more information
About Zandu:
‘Zandu’ more than century old household name in India and leading players in the healthcare system of Ayurveda with products including the popular Zandu balm, general fitness medicine, Kesari Jivan, Zandu Chyavanprash and digestive tonic Zandu Pancharishta. The net sales for Zandu stood at Rs 168.8 crs for the year ended March 2008, growing at a CAGR of over 11% over the past four years. The Company has strong research base with slew of products in the pipeline at various stages. Zandu has a number of world class manufacturing facilities and technologies in the field.
Visit www.zanduayurveda.com for more information.