Patanjali Foods Gets CCI Approval To Acquire Patanjali Ayurved's Home, Personal Care Business

Patanjali Foods Ltd. has received Competition Commission of India's approval for its proposed acquisition of the home and personal care business of Patanjali Ayurved Ltd., for Rs 1,100 crore. The acquisition will strengthen the 'Patanjali' brand's FMCG product portfolio, boosting Patanjali Foods' growth, according to an exchange filing on Wednesday.

This approval will accelerate the company’s transition into a leading player in the FMCG sector, it said. The shareholders of the company have already approved the acquisition on Aug. 4, 2024, pursuant to approval of the board of directors of the company.

Additionally, a licencing agreement has been established between Patanjali Foods and Patanjali Ayurved for a 3% turnover-based fee, along with other specified conditions.

This acquisition is anticipated to generate significant synergies in brand equity, product innovation, cost optimisation, and operational efficiencies, ultimately benefiting the company's market share. Notably, this marks Patanjali Foods' fourth acquisition in the past three years.

The Home and Personal Care business, which encompasses dental care, skin care, home care, and hair care, holds strong brand equity within India’s FMCG landscape, boasting a loyal consumer base nationwide.

This acquisition is expected to enhance Patanjali Foods' existing product portfolio with a diverse range of marquee brands, positively impacting revenue and Ebitda growth, it said.

The agreement also allows Patanjali Foods to utilise PAL’s trademarks and associated intellectual property rights related to the HPC product portfolio.

Shares of Patanjali Foods closed 1% higher at Rs 1,707 apiece, compared to a 0.12% decline at the benchmark NSE Nifty 50.

Three analysts tracking the company suggest a have a 'buy' rating on the stock, according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 29%.