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The Cabinet Committee on Economic Affairs (CCEA) on Tuesday approved FMCG giant Reckitt Benckiser’s plan to invest around Rs 3,300 crore via a subsidiary to fund its acquisition of Paras Pharmaceuticals Ltd.
A meeting of the CCEA held here cleared the proposal of Reckitt Benckiser Plc to set up a new, wholly owned subsidiary investing company with a foreign equity of 100 per cent to make a downstream investment to fully acquire Paras Pharma.
“The approval is expected to result in foreign direct investment (FDI) amounting to Rs 3,300 crore approximately in the wholly-owned subsidiary of Reckitt Benckiser Plc UK,” an official statement said
In December last year, Reckitt Benckiser had agreed to fully acquire Ahmedabad-based Paras Pharmaceuticals Ltd for Rs 3,260 crore.
The shares of the new subsidiary will be 100 per cent subscribed by Reckitt Benckiser (Singapore) (entire equity except 10 shares) and R&C Nominees Limited (10 shares), it added.
Paras Pharma is a privately-owned firm with a portfolio of leading over-the-counter health and personal care brands including, Moov, D’Cold, Dermicool, Krack, Itch Guard and Ring Guard. It also has a personal care business led by Set Wet, a leading hair gel and deodorant brand.
Reckitt Benckiser had acquired the firm as to expand its business in India.
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