Sunday, November 4, 2007

M&A wave hits consumer goods space; Dabur, HLL, Marico on prowl

Merger and acquisitions is the toast of the season and a full platter of deals is expected to hit the table very soon in the consumer goods space involving leading players like HLL, Dabur, Marico and United Spirits.
A number of consumer goods firms have sounded out their advisors and investment bankers with takeover plans in both domestic and international markets, while the likes of Dabur, HLL and United Spirits are actively eyeing growth through inorganic route, merchant banking sources said.
FMCG and healthcare products maker Dabur is holding discussions on a number of potential acquisitions, including Singapore’s beauty products manufacturer Unza Holdings, although it has been deterred by the high valuations being demanded by its target companies, the sources said.
Dabur’s top management team told analysts at a conference organised by investment banking giant Citigroup earlier this month that the price asked by most targets was too high and the company would wait for the right opportunity.
However, Dabur conceded that it was actively looking for acquisitions in both domestic and overseas markets.
The analysts believe that Dabur’s successful experience with past acquisitions has further boosted its appetite and it could continue to adopt inorganic growth route for complementing its existing product portfolios and expansion into the new segments and markets.
The company had recently acquired Balsara Hygiene at an attractive valuation, which it turned around within six months, and also got access to fast growing home care segment besides expanding its oral care portfolio.

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