Emami in race to acquire Henkel brands

KOLKATA/MUMBAI: Emami is evaluating a potential acquisition of Henkel India’s business, which is on the block. Acting on behalf of the German parent Henkel AG, HSBC this week started a process to divest the Indian unit’s detergents and personal care operations, banking sources said.

“Emami is interested. We shall be evaluating the opportunity as far as Henkel is concerned,” Emami director Harsh Agarwal told TOI. Henkel spokesperson could not be reached for comments.

Other potential bidders for Henkel’s Indian unit could include Dabur, Godrej Consumer Products, Jyoti Laboratories and Wipro Consumer Care, sources said.

TOI first reported on Henkel AG mandating HSBC for a potential sale of its Indian business, including a manufacturing plant in Tamil Nadu, in its edition dated February 15. Some companies like Dabur and Wipro could be interested only in the personal care business, that too, only the ownership brands.

Detergents accounted for half of Henkel India's turnover, which was pegged at Rs 450 crore in FY10. And the detergent sales have declined in recent quarters with the company slipping into red in the December quarter this year.

Most bidders would prefer to buy out Henkel’s local brands and vie for long-term rights to use its international brands such as Fa, Henko and Pril. Henkel may be looking to divest stake at the prevailing market price.

The stock closed 4.92% higher at Rs 37.35 on BSE. Its market cap, based on Thursday’s closing was at Rs 434 crore. Henkel India, in which the German parent holds 60% and AC Muthiah’s Spic 16%, has significant debts on the books.