Godrej Consumer Products Ltd (GSPL) Managing Director Dalip Sehgal has resigned. He will be replaced by Godrej group veteran A Mahendran, who is also the director of the group’s FMCG Cell, on July 1, according to a company statement. Sehgal, currently on a week’s leave, was unavailable for comment. His last day at GCPL will be June 30.
The news came at a time when the stock of GCPL soared 14 per cent on the back of the Issue Group acquisition, announced over the weekend. The stock hit an intra-day high of Rs 365, also its 52-week high.
Godrej group insiders said the news of Sehgal's exit had “surprised” them. Sehgal has quit at a time when the Rs 2,043-crore GCPL is on an acquisition spree. It has wrapped up four consecutive buyouts in the last three months. This includes Nigerian company Tura in March, Indonesian major Megasari Makmur in April, Sara Lee's 51 per cent stake in the Indian joint venture Godrej Sara Lee in the second week of May and the Issue Group acquisition now.
The fourth acquisition, that of Argentina-based Issue Group, a key player in the hair colour space, marks GCPL's foray into the Latin American market. So far all acquisitions of GCPL have been in the African, Asian and European continents. Issue is a leading player in Peru, Uruguay and Paraguay. Its presence in Brazil is growing. GCPL was said to be in talks with Issue for a while, before it finally wrapped up the acquisition this month.
The deal has been valued at approximately eight times Ebitda (earnings before interest, tax, depreciation and amortisation) of Issue.
