HUL gains after signing agreement with Mosons Group to acquire Indulekha brand

Hindustan Unilever gained 0.95% to Rs 861.90 at 15:25 IST on BSE after the company said it has signed an agreement with Mosons Group to acquire its flagship brand 'Indulekha'.

The company made the announcement during market hours today, 17 December 2015.

Meanwhile, the BSE Sensex was up 322.29 points, or 1.26%, to 25,816.66.

On BSE, so far 1.13 lakh shares were traded in the counter, compared with an average volume of 1.12 lakh shares in the past one quarter.

The stock hit a high of Rs 863.50 and a low of Rs 850.50 so far during the day.

Hindustan Unilever (HUL) said that the proposed acquisition is in line with HUL's strategic intent to strengthen its leadership position in personal care by providing an impetus to its play in the evolving premium naturals segment. The deal envisages the acquisition of the trademarks, Indulekha' and 'Vayodha', intellectual property, design and knowhow, for a consideration of Rs 300 crore, payable upon closing of the transaction and a deferred consideration of 10% on the domestic turnover of the brands each year, payable annually for a 5 year period commencing financial year ending 31 March 2018 (FY 2018). Indulekha was first launched in 2009 as a premium ayurvedic hair oil.

The transaction is subject to fulfillment of certain conditions and the parties will work together to complete this over next few months. Mosons will continue to manage the business until the completion of the transaction.

Indulekha brand with a strong presence across Kerala, Tamil Nadu and Karnataka and a recent foray into Maharashtra, had a turnover of Rs 100 crore and EBITDA (earnings before interest, taxes, depreciation and amortization) margin of around 30% for the year ended 31 March 2015 (FY 2015).

HUL is India's largest fast moving consumer goods (FMCG) company.

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