The Hindu Business Line : Marico acquires Egyptian haircare brand Fiancée

The Fiancee brand comprises `value for money' hair creams and a hair gel range and has a 20 per cent share in the Rs 170-crore haircare market in Egypt.

Mumbai , Sept. 13

Marico Ltd has acquired the haircare brand Fiancée from the Egypt-based Ready Group for an undisclosed amount.

The Fiancee brand comprises `value for money' hair creams and a hair gel range and has a 20 per cent share in the Rs 170-crore haircare market in Egypt. It also gives the company access to the manufacturing and sales infrastructure for the 15-year-old brand.

In a notice to the BSE, the Marico Group Chairman, Mr Harsh Mariwala, said, "This footprint in Egypt will help us widen our strides in the international haircare market". Mr. Sayed El Ready, Chairman of the Ready Group, said, "Marico with its expertise in the haircare segment, would make a big success of the Fiancee brand.

International business

Marico 's international business turnover during FY 2006 was Rs 117 crore — about 10 per cent of the Group's revenue. During 2006, Marico made four acquisitions both within and outside India. Adopting a strategy of growing through acquisitions, Marico is open to buying out more brands globally in the beauty and wellness segments.

Commenting on its latest acquisition, Mr Vijay Subramaniam, CEO, International Business, said, "Egypt is a growing economy with a population of about 77 million. This coupled with the buoyant haircare market represents a significant opportunity. With Fiancée under our belt, we could target a turnover of Rs 50 crore-55 crore from Egypt during the next fiscal."

Mr Milind Sarwate, Chief Financial Officer, Marico Group, said: "This acquisition, our fifth in 18 months, would accelerate our shareholder value enhancement efforts. Also, the diversity which Fiancée brings to our portfolio, would help us moderate the share of our flagships in both turnover and profits."

Payments

The consideration for the deal will be paid over the next 6 months in two tranches, based on the brand's performance. Marico, using a short-term loan facility, has already paid one. The FMCG company would take a fresh look at its financing pattern and would modulate the debt and equity mix suitably. The shareholders of Marico Ltd have already approved a financing plan that envisaged funds up to Rs 500 crore being raised by way of debt and / or equity. The company has clarified that there is, as yet, no formal proposal before the board.

Ernst & Young India advised Marico on this transaction. The Ready Group was advised by HC Securities & Investment, Cairo, Egypt. Marico's scrip price closed at Rs 518.30 and was up by 1.03 per cent compared to yesterday's closing price of Rs 513.