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The Mumbai-based Jyothy Labs is likely to announce its acquisition of the German multinational Henkel AG's stake of 51 per cent in Henkel India during the course of this week. With other FMCG majors backing out of the bidding process it is Jyothy's first-mover advantage in having bagged the 14.9 per minority stake of Tamil Nadu Petro Products (Henkel's joint venture partner), that has helped it emerge as future owner of the Rs 400-crore Henkel India.
While Jyothy always had the option of going in for an open offer to become a majority shareholder in the company, it is now likely to exercise the option of acquiring the balance 51 per cent of Henkel AG to gain ownership of Henkel India.
While there has been talk of other MNCs trying to buy the balance stake in Henkel, it is unlikely that any of them will be successful although there is a possibility of certain brands being sold from the Henkel portfolio. Analysts tracking the company now fear that Jyothy might just end up paying a hefty price for the balance stake, being the sole bidder.
According to an analyst from a Mumbai-based broking firm, “While the chances of Jyothy buying out Henkel may seem good, it would be bad news in terms of the amount it would have to pay for a debt-ridden, loss-making company like Henkel.''
Jyothy Labs paid Rs 60.5 crore to acquire 14.9 per cent in Henkel at Rs 35 a share. It would now be shelling out in excess of Rs 15 a share to acquire the balance 51 per cent of Henkel AG in Henkel India.
Besides, other FMCG players, who were in the race to acquire Henkel, have backed out after Jyothy became a minority shareholder in the company.
Mr Harsh Agarwal, Director, Emami said, “We have not bid for the Henkel stake and the deadline has already passed. We did not find an opportunity in bidding for Henkel and when there are fewer bidders, the sellers tend to dictate the price. However, we would continue to look for more international and domestic acquisitions.''
Mr A. Mahendran, Managing Director, GCPL said, “Unless Jyothy exits, we are not bidding for Henkel. In any case we do not have detergents in our portfolio and we are interested in acquiring brands, not companies.''
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