Marico sells Sil to Denmark's Good Food

Maker of hair oil brand Parachute, Marico announced that it has sold off its processed foods business under the brand "Sil " to a Danish business house, Good Food Group.

The Indian subsidiary of Good Food Group, Scandic Food India (Scandic) bought the Sil business from Marico for an undisclosed sum.

Marico had been on the lookout for a buyer to divest Sil for about an year now and this sale is the first divestment by the company as a step towards getting out of non-core businesses.

Saugata Gupta,CEO, consumer products business, Marico, said, "We have been focusing on our core businesses and have hence decided to divest the Sil business. This will release management bandwidth for our core that is beauty and wellness. Although Sil was a very small part of our business, it would provide a good platform to Scandic Food to farm the jams and sauces category in India".

The sale is not a distress sale, says the company, and there will be no significant financial gain either. Marico has done seven acquisitions in the last 35 months and has a debt to equity ratio of 1 in its books.

The divestment of Sil is on a slump sale basis (transfer of one or more undertakings as a result of the sale for a lumpsum consideration without values being assigned to the individual assets and liabilities in such sale) and includes the manufacturing facility at Saswad, near Pune . Scandic will take on board the present employees at Marico's facility.

The deal, carried out directly between Marico and Good Food Group is expected to enable Marico have greater focus on its significantly larger core businesses and will help Good Foods Group with an easier entry in India.

"Business is about building relationships and hence we would help Scandic with the distribution of the Sil brand for a period of one year" said Milind Sarwate, Marico's chief HR and Strategy.

Otto Christensen, chairman of the Good Food Group, stated, "The acquisition of Sil business enhances our presence in the country and complements our range of premium jams under the brand Dana".