Consumer goods major Dabur Ltd on Wednesday announced that it has signed definitive agreements to acquire majority stake in Badshah Masala Pvt Ltd, one of India’s oldest spice makers.
Dabur, as per a stock market disclosure, will be picking up 51% stake in Badshah Masala for nearly Rs 588 crore.
The transaction is aligned with Dabur's strategic intent to expand its foods business to Rs 500 crore in 3 years and expand into new adjacent categories. This also marks Dabur's entry into the over Rs 25,000 crore branded spices and seasoning market in India.
“The Indian spices and seasoning category is a large and attractive market. Badshah Masala is one of the key players in this space. We intend to leverage our international market presence to grow this business globally,” said Dabur India Ltd chairman Mohit Burman.
While Dabur’s counterparts such as ITC, Marico and Emami have been offlate actively scouting for inorganic bets and minority investments, Dabur struck a domestic deal after a considerable gap.
Dabur will acquire the remaining 49% stake in a span of next 5 years. The company said that branded spices market in India is growing at healthy double digits, led by increasing consumption, upgradation from unbranded to branded and growing preference for regional flavours across states, while highlighting the rationale behind the acquisition.
Badshah Masala was launched in the year 1958. The company has over 50 products available in India and overseas markets. Blended spices form 82% of the company’s revenue. It has 2 manufacturing facilities located in Umargam, Gujarat.
Dabur is a widely known brand in ayurvedic and natural health care categories. Some of its power brands are Dabur Chyawanprash, Dabur Honey, Dabur PudinHara and Dabur Lal Tail, Dabur Amla, Dabur Red Paste and Vatika.
During FY 2021-22, Dabur recorded consolidated revenue from operations of Rs 10,889 crore and consolidated profit after Tax of Rs 1,742crore.
Dabur India through its subsidiaries has acquired the entire stake in Bangladesh-based Asian Consumer Care from its joint venture partner Advanced Chemical Industries for about Rs 51 crore.
Dabur held 76 % stake in the firm before acquisition through its subsidiary Dabur International, while the remaining 24 per cent was held by Advanced Chemical Industries.
Otherwise, the FMCG major had also struck quite a few inorganic bets in Africa, outside Indian soil. It counts South African entities- D&A Cosmetics Proprietary Ltd and Atlanta Body & Health Products Proprietary Ltd- among its portfolio firms, which it bought out in 2018.
In November 2016, Dabur said it would acquire the personal care, hair care and creams businesses of the South Africa-based CTL group of companies. The deal, valued at $1.5 million back then, marked Dabur’s entry into the South African personal care market.
This deal was preceded by Dabur’s first takeover deal on the continent in July 2016 when it had bought South African cosmetics manufacturing and trading firm Discaria.
In July 2010, Dabur had made its first foreign acquisition by buying Hobi Kozmetik Group, a personal care products company in Turkey, for $69 million. The same year, it clinched its biggest deal so far by acquiring Namaste Laboratories in the US for $100 million.