The hunger for growth is driving domestic fast moving consumer goods companies to snap up new firms and brands across the globe. These cash-rich companies have been waiting for the right moment and it seems to be now, as valuations remain tepid in most parts of the world.
In the past five months, at least seven outbound deals have taken place, signifying the intent of these companies to expand their operations abroad. Together, these transactions amount to over Rs 30 billion (Rs 3,000 crore), higher than the total value of outbound deals in the past three years, according to research firm Grant Thornton.
Godrej Consumer Products Ltd has wrapped up four deals in three months. These include the buyout of Nigerian company Tura in March for Rs 4-5 billion (Rs 4-5 billion (Rs 400-500 crore), of Indonesian company Megasari Makmur in April for Rs 10-12 billion (Rs 1,000-1,200 crore), the acquisition of the 51 per cent Sara Lee stake in the Indian joint venture, Godrej Sara Lee, in the second week of May for Rs 10.55 billion (Rs 1,055 crore), and the buyout of Latin American firm Issue for Rs 2.3 (Rs 230 crore).
With this, GCPL has almost exhausted the Rs 30 billion (Rs 3,000 crore) war chest it had set aside for acquisitions. The company is unlikely to sit still as it eyes more buyouts in the markets of Asia, Africa and Latin America. "We will continue with acquisitions," GCPL Chairman Adi Godrej had said to Business Standard, when announcing the buyout of the Sara Lee stake in the Indian joint venture.
For this, GCPL may seek