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Godrej Consumer Products acquires Raymond's FMCG biz for Rs 2,825 cr

RCCL will be a listed entity with a pure-play consumer-focused lifestyle business and sell the consumer products business to GCPL in a slump sale

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Dev ChatterjeeSharleen Dsouza Mumbai

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Godrej Consumer Products (GCPL) on Thursday announced the acquisition of the consumer products business of Raymond Consumer Care (RCCL), a subsidiary of BSE-listed Raymond, in an all-cash deal of Rs 2,825 crore.

With this transaction, Godrej will get Raymond’s marquee brands such as Park Avenue (for the consumer products category), KS (deodorants), KamaSutra, and Premium. Park Avenue as a clothing brand will remain with Raymond.

RCCL will be a listed entity with a pure-play consumer-focused lifestyle business and sell the consumer products business to GCPL in a slump sale. This will enable RCCL to be free of net debt.

For 2022-23, RCCL reported revenues of Rs 622 crore and, of this, 85 per cent came from the business now being sold to GCPL. After demerging the lifestyle business, Raymond would primarily be a listed real estate company with investment in the engineering and denim businesses.

Raymond will deploy the proceeds of the sale in the lifestyle business like retail stores and ready-to-wear clothing, now housed under RCCL. GCPL shares closed 2.35 per cent down at Rs 953 a share, taking the market valuation to Rs 97,500 crore. Raymond closed 6.55 per cent up at Rs 1,717 a share.

“We are excited to welcome the Raymond Consumer Care team and brands to Godrej Consumer Products. This acquisition allows us to complement our business portfolio and growth strategy with under-penetrated categories that offer a long runway of growth,” said Sudhir Sitapati, managing director and chief executive officer, GCPL.
Deal dynamics
  • Raymond to demerge its lifestyle business to Raymond Consumer Care (RCCL), which will be listed
  • Raymond to house real estate business; will turn net debt-free after the deal
  • Godrej to acquire Raymond’s marquee brands such as Park Avenue and KamaSutra
These categories can deliver double-digit growth over decades, given the low per capita consumption in India compared to similar emerging markets.

“We look forward to building on this potential by unlocking the significant integration synergies with our business,” he said.

Raymond officials said the move would help to create shareholder value and focus on the real estate business.

“In line with our commitment for creating shareholder value, we have taken affirmative action by demerging our lifestyle business that will be a separate listed entity with zero net debt. At Raymond group, the realty business will also be the listed entity through Raymond,” said Gautam Hari Singhania, chairman and managing director of Raymond, in a news conference.

Raymond Chief Financial Officer Amit Agarwal said: “We decided to sell the business because we thought we had created a brand and we need a partner to take it to the next level.”

“We will be expanding our footprint in retail under RCCL. In the real estate business, we will focus on the Mumbai region,” he said.

Atul Singh, group vice-chairman, Raymond Group, said the company took pride in building strong home-grown brands.

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First Published: Apr 27 2023 | 4:50 PM IST

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