Henkel'S Bid To Buy Swc Subsidiaries Hits Speed-Breaker

According to sources, some of the shares of the two subsidiaries are held by investment companies in the Shaw Wallace group that are now under investigation. And, Henkel is not interested in acquiring these shares until all charges are cleared.

With the investment companies under investigation, the German detergents major fears the shares may become attached for some reason, some time in the future.

Hence, a meeting that was scheduled to take place between Shaw Wallace and the Henkel top brass on September 19 has now been postponed.

Decks for the takeover of Calcutta Chemicals was cleared when it was de-registered from BIFR, a precondition set by Henkel.

 

The company is tightlipped about the actual stake of the two subsidiaries that is held by the investment companies. All that can be said is that without these shares Henkel's stake in the two subsidiaries will not be as high as we would like it to be, a source said.

Henkel's interest in acquiring the two Shaw Wallace companies, however, remains.

In fact, the Henkel Spic management will not even be renegotiating its offer now, although the memorandum of understanding (MoU) signed between the two has expired. The open offer to the public will, however, have to be re-issued.

Industry analysts believe that with its current spate of financial problems there will be few takers for the two companies, involved in the consumer products' business for the Shaw Wallace group.

Early contenders, Levers and Procter and Gamble, are no longer in the race. Henkel, however, is still interested because it is keen to acquire the brands and distribution network of Calcutta Chemicals and Detergents India. The other two multinationals already have well-established brands as well as an extensive distribution network in the eastern region.