Patanjali Foods Ltd on Monday said it would acquire the home and personal care business of its group company, Patanjali Ayurved, for 1,100 crore.

The acquisition will help Patanjali Foods to become an FMCG company.

In a statement, Patanjali Foods said its board of directors has approved the “acquisition of the entire non-food business undertaking i.e. hair care, skin care, dental care and home care carried out by Patanjali Ayurved, including but not limited to all movable assets, immovable properties, contracts, licences, books and records, employees and certain assumed liabilities of PAL through a slump sale arrangement on a going concern basis.”

The deal will accelerate the company’s transition into a leading FMCG company, it added.

The acquisition is subject to the approval of shareholders and lenders.

“The transfer of the home and personal care business has been mutually negotiated between the company and Patanjali Ayurved (basis valuation exercises conducted by independent valuers) for a lump sum consideration of 1,100 crore only,” the company said.

Both the companies have also agreed to enter into a licensing agreement, permitting Patanjali Foods to use the trademarks and associated intellectual property rights owned by Patanjali Ayurved.

“The acquisition will bring along with it multiple key synergies in terms of brand equity and enhancements, product innovations, cost optimisation, infrastructure & operational efficiencies and positive impact on market share,” Patanjali Foods said.

Patanjali Ayurved’s home and personal care business currently has strong brand equity in India’s FMCG space and enjoys a loyal consumer base across the country. It caters to four key segments – dental care, skin care, home care, and hair care.

Patanjali Foods Ltd (formerly known as Ruchi Soya Industries Limited) was incorporated in 1986. It is present in edible oils, food and FMCG and wind power generation segments via a bouquet of brands like Patanjali, Ruchi Gold, Nutrela, etc.

Shares of Patanjali Foods Ltd closed at 1,699.65, higher by 108.30 or 6.81 per cent on the BSE on Monday.

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