Marico announces stake sale to fund Paras Personal Care acquisition

Indian FMCG firm Marico said that it would sell its 4.56% stake to two foreign investors to raise INR5bn ($97.8m) to fund acquisition of Paras’ personal care business from Reckitt Benckiser.

Marico said it will sell 3.42% stake to Indivest, an affiliate of Government of Singapore Investment Corporation, and 1.14% to Baring Private Equity India.

The company plans to infuse fresh equity and internal accruals to fund the consideration payable for the proposed acquisition.

Indivest will invest INR3.75bn ($73.3m) to obtain over 22 million shares while Baring India Private Equity Fund will pay INR1.25bn ($24.4mn) for 7.35 million shares, both at INR170($3.3) per share on preferential allotment basis.

According to the company, the proposed stake sale is a part of the funding requirements to complete acquisition of Paras Personal Care business which it will also use for other capital expenditure.

In February 2012, Marico had signed a deal with Reckitt Benckiser to acquire Paras Pharmaceuticals’ personal care business for an undisclosed amount, and had acquired both pharmaceuticals and personal care businesses last week for INR32.6bn ($637.4m).

Marico’s brands include Parachute, Saffola, Hair & Care, Nihar, Mediker, Revive, Manjal, Kaya Skin Clinic, Aromatic, Fiancee, Hair Code, Xmen, Hercules, Caivil, Code 78 and Black Chic.