Agrolimen To Buy 49% In Dabur Unit

Dabur India Ltd would be selling 49 per cent it holds in a joint venture with Spain's Agrolimen, General de Confiteria India Ltd (GCIL), to the foreign partner. At one time, Dabur India was looking for any buyer for its stake in GCIL owing to differences with Agrolimen over the price.

Dabur India sources told Business Standard that the deal with Agrolimen would be finalised `sooner than later' and a decision to this effect has been taken `in principle'. Agrolimen holds 51 per cent stake in GCIL.

GCIL's chief executive Arun Hegde refused to comment on the Dabur-Agrolimen deal, when contacted. "No comment," he said, adding that Dabur would be the best sources for such details.

 

Dabur sources, however, refused to divulge the price at which Agrolimen would be picking up the former's stake in GCIL.

Earlier, differences had cropped up between the two partners in the confectionery joint venture over the price for Dabur's 49 per cent stake which the industry had pegged at around Rs 45 crore. Though, Dabur officially has contested this figure saying no such price had been arrived at for its 49 per cent stake.

GCIL manufactures chewing gums and soft-filled candies and Dabur's impending exit from the venture is due to the fact that it feels the activities are outside its core area of competence.

Earlier in June, industry minister Sikander Bakht had rejected a proposal of GCIL to include in its present activities marketing and distribution of confectionery items and chewing gums manufactured by small scale sector despite the Foreign Investment Promotion Board's (FIPB) recommendation for its clearance.

On the recommendation of McKinsey, the Dabur group is changing its profile as per the needs of 90s-end corporates by going in for outright sale of its natural gum business, Level and Dentacare brands and getting out of business like non-oncological pharmaceutical business, where it does not have core competency.

Dabur's AGM held on Wednesday okayed the changes suggested by McKinsey and the handling of the company's day-to-day activities by professionals. DIL is to get a chief executive by the year end.

Meanwhile, Dabur has not yet decided on the quantum of the stake which it would offload to Nestle in a joint venture, Excelsia which started off a JV between Israel's Osem and Dabur. With Nestle becoming the largest shareholder in Osem overseas, it wanted to hike its stake in Excelsia to majority from 40 per cent which was held by Osem.

"We have not yet decided how much will be offloaded to Nestle," sources in Dabur, which has 60 per cent stake in Excelsia, said. But this has not stopped Excelsia from introducing new products in the market.

Excelsia will introduce this month centre-filled cookies in different flavours under the brand name Fillings.