Fmcg M&a India

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As part of the assignment in my industry, FMCG industry, I have taken the following mergers. 1)Dabur India Limited acquisition of Balsra Group
2)HUL Acquisition of Modern Foods India Limited
3)Marico market Extension acquisitions in Egypt.

Dabur India Limited acquisition of Balsra Group
Dabur acquired three Balsara companies - Besta Cosmetics, Balsara Hygiene Products and Balsara Home Products in January 2005 for a consideration of Rs 143 Cr. The three companies were loss making units but with distinct brands. This conglomerate merger was done primarily for product extension but synergies were also seen in the distribution network. The merger has been quite successful considering the fact that all loss making units were turned around in within 6 months. Y/E March

(Rs cr)
FY2004 FY2005 FY2006FY2007FY2008
Net Sales1,068.531,246.161,360.891,641.932,115.80
% chg
Net Profit 136.77186.77239.64313.01400.91

The main motive of the merger was inline with Dabur’s philosophy of acquiring under- marketed brands and use Dabur’s distribution network to strengthen the sales for the same. Economies of scale were achieved in production and distribution of goods. Significant discounts were also obtained for advertising and marketing charges. The growth of two acquired brands significantly highlights the benefits wrested by Dabur from the acquisition.

Dabur Lal Dant Manjan 6554.8
Toothpaste Market24,353.6025,035.0026,801.5029,303.80

Both Babool and Meswak have been able to increase market share in a growing market thus staving off market share decline of Dabur’s main oral care brand, Dabur Lal Dant Manjan.

HUL Acquisition of Modern Foods India Limited
Hindustan Lever Limited bought a 74% stake in Modern Foods Limited, a company disinvested by the central government as part of the privatization program, for 108Cr in January 2000. The...
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