Marico arm buys Code 10 from Colgate-Palmolive

The Malaysian arm of fast moving consumer goods (FMCG) player Marico has acquired hair-styling brand Code 10 from Colgate-Palmolive for an undisclosed sum. The buyout marks the company’s entry into the Malaysian hair-styling market. It is also the company’s first since the acquisition of Durban-based Enaleni Pharmaceuticals in late 2007.

Marico’s presence in Malaysia is through its flagship brands — Parachute and Nihar. The turnover of the Code 10 brand is Rs 12 crore. The deal envisages the acquisition of the brand Code 10, as well as related intellectual property rights, by Marico Malaysia Sdn Bhd, a wholly-owned arm of Marico West Asia FZE.

Code 10 range comprises hair gels and hair creams. The Malaysian hair-styling market is estimated at 150 million ringgits ($43.86 million, or over Rs 200 crore).

Code 10 was the third-largest player in the country, with a double-digit market share, Marico said in a statement. Marico stock lost 0.58 per cent to settle at Rs 102.40 per share at close of Monday’s trade on the BSE.

Milind Sarwate, chief of finance, HR & strategy at Marico, says: “Marico leads the market in key hair-styling segments, such as hair creams in West Asia. We hope to replicate this success in South-East Asia with this acquisition, our first one in this region.”

Marico had acquired the Fiancee and HairCode brands in Egypt in 2006. As part of the transaction, Marico Malaysia Sdn Bhd and Colgate-Palmolive Sdn Bhd entered into a transition services agreement, whereby Colgate-Palmolive will continue to distribute the Code 10 range of products for a limited period. The sale of Code 10, the company said in a press statement, was consistent with Colgate-Palmolive’s strategy to focus on its fast growing oral, personal and pet care ventures.