Business Daily from THE HINDU group of publications
Tuesday, Jul 03, 2007
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Business Daily from THE HINDU group of publications Tuesday, Jul 03, 2007 ePaper |
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Marketing
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Strategy Corporate - Mergers & Acquisitions Godrej Sara Lee buys Sara Lee biz in India
Mr Adi Godrej
Our Bureau Mumbai, July 2 Consolidating its operations in the Indian subcontinent, the US-based Sara Lee Corporation has sold its subsidiary’s business in India and Sri Lanka to its existing joint venture company Godrej Sara Lee(GSLL) for $13 million. GSLL will now be manufacturing, marketing and distributing the brands owned by Sara Lee Household and Body Care like Kiwi Shoe Polish, Kiwi Drainex drain cleaner and Brylcream brand of hair care. Mr Adi Godrej, Chairman of the Godrej Group, told Business Line: “The business and operations of Sara Lee Household and Body Care will be transferred to GSLL with effect from July 7. We believe we have paid a feasible price f or the Sara Lee brands and the acquisition will add to the value of the company as profits and turnover will go up. The shareholders of Godrej Industries will also benefit from this deal.” Sara Lee Corporation has a 51 per cent stake in Godrej Sara Lee while the balance is held by the Godrej Group in which Godrej Industries has a 20 per cent stake. “The dividend paid to the shareholders of Godrej Industries, which has a 20 per stake in the company, would go up as result of this acquisition,” said Mr Godrej. Mr A. Mahendran, Managing Director, Godrej Sara Lee Ltd, said: “Sara Lee was keen on moving all its brands to one company to efficiently manage its portfolio in South Asia. By moving these brands to GSLL, Sara Lee will have access to the Godrej distribution network, as well as the management and marketing support.” The Rs 625-crore GSLL was already distributing the Kiwi cleaning range. Now it would add two more brands to its portfolio and distribute the same through its network of 2,000-odd distributors across the country along with its own household insecticide brands such as GoodKnight, Hit and Jet. Added Mr Ravi Venkatesh, Chief Operating Officer, GSLL, “We have basically bought the three Sara Lee brands for $13 million and this would add to our existing turnover.” The Chennai-based Rs 140-crore Sara Lee Household and Body Care was started as a joint venture between Sara Lee Corporation, US, and the TTK group in October 1993. In January 2002 this was converted into a 100-per cent subsidiary of Sara Lee.
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