Deal size estimated at over Rs 1,000 crore. |
Wipro Consumer Care, the Rs 818-crore consumer care and lighting division of infotech major Wipro, is close to buying out Unza, the Singapore-headquartered consumer care company. |
Sources said the deal size was estimated at over Rs 1,000 crore. Wipro executives declined to comment on the deal. |
Other Indian bidders like Dabur, Emami and Godrej were out of the race over valuation issues, sources said. |
Unza is a manufacturer and marketer of personal care products with a predominant presence in South-East Asian markets. The company has 48 brands spanning products like soaps, shampoos, deodorants and talcum powder and a presence in over 58,000 retail outlets in South-East Asia. |
Wipro's product basket is more diversified and includes natural sweeteners, honey, soaps, talcum powder, laxatives and light bulbs. Consumer care products account for only 5 per cent of Wipro's consolidated revenue of Rs 15,000 crore. |
Industry analysts felt acquiring Unza would be a good opportunity for Indian consumer goods companies, due to the company's extensive distribution channel and large manufacturing base. |
However, the pitfalls of acquiring a company with such a huge product offering could prove daunting for Indian players who are relatively inexperienced in international markets. Teething problems like product integration might take over two years, analysts felt. |
Some analysts were also sceptical about Indian companies using Unza's distribution channel to market their products. |
"Consumer products require customisation according to regional needs. Indian brands might not suit conditions elsewhere and Indian companies might not have the expertise to doctor their products to make them suitable for conditions elsewhere," said one analyst. |
Analysts seemed unsure about how Wipro might leverage this acquisition, although an industry expert felt the buy-out would only be to Wipro's advantage in the long run. |