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Domestic FMCG firms on buyouts juggernaut

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The year 2010 witnessed a total of 13 acquisitions mostly global, that is how Indian companies announced their arrival in the global FMCG space as they fastrack their way to international expansion.

Led by Godrej, which had seven acquisitions on its account, domestic firms, including Marico (2 buyouts), Dabur (2 acquisitions) and Emami (1 buyout) went on a global buying-spree during the year. The total valuation of the acquisitions could not be ascertained as the firms decided to keep it under wraps except for one or two who were forthcoming.

Multinational FMCG giant Reckitt Benckiser beat Indian rivals, like Emami and Dabur, by buying over Ahmedabad-based Paras Pharmaceuticals for Rs 3,260 crore. This was by far the biggest deal of the year.

The saga of acquisitions for the year began with Marico, which sells hair oil brands like Parachute and Nihar, buying hair styling brand ‘Code 10’ from Colgate-Palmolive for an undisclosed amount.
Later, during the year the Mumbai-based firm also bought the aesthetics business of Singapore-based Derma Rx Asia Pacific (Derma Rx), through its wholly-owned subsidiary, Kaya Limited.

Further, Godrej Consumer Products announced its acquisition of a leading African personal care brand Tura from Nigeria’s Tura Group. Within a period of one month, the company bought out Indonesia-based insecticides maker, Megasari Makmur Group and its distribution firm for an undisclosed sum.

Despite the challenge, the FMCG industry estimated to be valued at Rs 1.25 lakh crore, was buoyed by a good monsoon and robust rural demand. Industry body Confederation of Indian Industry (CII) had even predicted a growth of 13 percent this fiscal for the sector.

Posted on: 24.12.2010

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