Patanjali Foods Ltd’s board has given the green light to the proposal from Patanjali Ayurved Ltd to acquire its Home and Personal Care Business, marking a significant move in the company’s evolution into a major player in the FMCG industry. The HPC business of PAL currently holds a strong position in India’s FMCG sector and has a dedicated consumer base nationwide. It currently operates in four main segments, including dental care, skin care, home care, and hair care,” the company announced in a filing with the stock exchange.
The transfer has been agreed upon for a lump sum amount of Rs 1,100 crore, subject to customary closing date adjustments and other terms outlined in the business transfer agreement,” the company added.
The company has confirmed a 20-year licensing agreement with Patanjali Ayurved, which includes a 3% turnover-based fee and other terms. This agreement is expected to result in the consolidation of the ‘Patanjali’ brand FMCG products portfolio, bringing various synergies such as brand equity, product innovations, cost optimization, operational efficiencies, and increased market share.
The company has reiterated its commitment to becoming a significant player in the FMCG sector, as promised during its initial FPO. This announcement was made after the market closed today. Patanjali Foods shares rose by 6.81% to Rs 1,699.65 earlier in the day.