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Godrej Consumer Products Ltd (GCPL) has decided to divest its non-core foods business in its Indonesian subsidiary PT Megasari, to private equity firm Creador. The Godrej Group had acquired the Indonesian company PT Megasari in 2010. The foods business in Indonesia includes cereals, snacks and instant food products under the brands Simba and Turbo.
Under this agreement, Godrej’s Indonesian subsidiary will continue to distribute these brands for a two-year period. HSBC acted as an exclusive advisor to Godrej.
Shares of GCPL rose by 0.10 per cent and closed at Rs 723 on Friday. Commenting on the divestment, Adi Godrej, Chairman, GCPL said, “Our decision to divest the foods business is very much in line with our strategic intent to focus on home and personal care. The divestiture of this business will improve the margin profile of our Indonesian business and help the team to take the household and personal care platforms to their full potential.”
Naveen Gupta, COO of the Godrej Indonesian Business, added, “Under GCPL, our foods business did not have the benefit of a global innovation platform like we have in our other categories of household insecticides and air care. This divestment will now enable us to focus on our key brands — Hit, Stella and Mitu and further accelerate their growth trajectory.”
In India too, the Godrej Group recently exited the foods business by breaking off its joint venture with US-based confectionary major Hershey. Creador is a private equity firm focused on long-term investments in growth-oriented businesses in Indonesia, India and Malaysia. Some of Creador’s recent investments include Cholamandalam, a leading vehicle financing business in India, OldTown White Coffee – a regional chain of Asia restaurants and a leading 3 in 1 white coffee brand and MNC Skyvision – Indonesia’s leading DTH operator.
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