The Hindu Business Line : Wipro buys Unza for $246 m

Bangalore, July 6 Wipro Ltd took a major plunge into the global FMCG arena on Friday by announcing the acquisition of Unza Holdings Ltd, a Singapore-based personal care products manufacturer, for $246 million (Rs 1,010.2 crore) in an all-cash deal.

Unza, with revenues of Rs 683.3 crore for the year ended April 2007, is a leading toiletries maker in the South-East Asian region.

Major brands from the Unza portfolio include Enchanteur, Safi, Romano, Dashing and Izzi and detergent brands such as Vigor and Maxkleen.

Mr Vineet Agrawal, President of Wipro’s Consumer Care and Lighting business, said that the deal would be completed by July-end and the revenues will accrue from the current quarter (July-September) itself.

Wipro is funding the acquisition from internal accruals, he added.

Unza’s revenues grew 14 per cent in dollar terms last year and operating profit margins stood at 12 per cent, while Wipro Consumer Care’s margins were 12.5 per cent. “As a result, we don’t expect any dilution of margins.”

Wipro shares hit an intra-day high of Rs 520.70 on the BSE on Friday before closing at Rs 519.45, a gain of three per cent over the previous close.

With an employee base of 4,000 in five manufacturing locations spread across four nations – Malaysia, Indonesia, Vietnam and China – Unza has some 48 brands in its portfolio.

The marketing operations span 40 countries, including Malaysia, Indonesia, Vietnam, Singapore, China, Hong Kong and Nigeria.

“The Unza deal doubles our footprint in terms of addressable market size,” Mr Agrawal said.

“It doubles our turnover and gives us wide access to our products in Malaysia, Indonesia and Vietnam, among other countries, even while providing synergies in terms of sourcing, packing and access to vendors.”

To a query, Mr Agrawal said that the Unza brands have strong equity and Wipro does not plan to change the brand structure.

“We need to do consumer tests to see what brands are relevant to India before bringing them here.”

Unza has a range of creams, lotions and shampoos among other toiletries products, “which are complementary to us.”

Wipro would explore options to take its flagship brand, Santoor, to countries such as Vietnam and Nigeria, he added.

Wipro’s consumer care business grew 36 per cent year-on-year during the fiscal gone by, with revenues of Rs 818 crore.

Mr Agrawal said that there would not be any management changes in Unza as it is being run professionally.

After Spectramind, Unza is the largest deal in recent times for Wipro.

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