Due diligence on for companies in US, Egypt, Malaysia

Neha Kaushik
Dharini Nagarajan

New Delhi, April 26

FMCG major Dabur India is in the process of conducting due diligence to acquire a vitamins/supplements company in the US, an FMCG brand in Egypt and an FMCG company in Malaysia, according to market sources.

On the domestic front, close on the heels of the Balsara acquisition, the company is also learnt to be in advanced talks to acquire an FMCG firm operating in the herbal/ayurvedic domain.

Dabur is learnt to have earmarked up to Rs 500 crore for making these acquisitions.

Dabur had earlier this year said that it was looking at inorganic growth opportunities both in India and abroad to grow its revenues.

The company expects overseas sales to contribute about 20 per cent of sales in the next few years as compared to the existing nine per cent.

Dabur already has six plants overseas including in Egypt, Nigeria, Dubai, Bangladesh and Nepal. It was also looking to commence local manufacturing in Pakistan and Russia. It has been actively focusing on expanding its overseas business with emphasis on the South Asian markets and Russia.

Market watchers point out that Dabur's recent decision to adopt US GAAP standards can also be seen in light of the company's growing appetite for overseas acquisitions as it would now be "prepared" in case an acquisition in the developed markets materialises.

Meanwhile, post the acquisition of Balsara, Dabur is learnt to be stepping up focus on contract manufacturing for foreign firms/institutions based in the US and the European Union.

The company currently contract manufactures oral care products for private labels of stores and Government institutions based in the US. The company plans to grow this business, currently estimated at Rs 10-12 crore, to Rs 50-60 crore in the next four years.

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(This article was published in the Business Line print edition dated April 27, 2006)
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