Godrej Consumer Products Ltd (GCPL) has agreed to acquire a 75 per cent stake in Kenya’s Canon Chemicals Ltd for an undisclosed amount, as the Indian consumer-goods company strives to expand its Africa business.
The acquisition of the home and personal care products maker is subject to approval from the Competition Commission of Kenya, GCPL in a statement. The deal is likely to be approved within four months of making the application, it added.
Canon had revenue of 1,146 million Kenyan shillings, or about Rs 76 crore ($11 million), for the year ended June 2015. This is up from 1,097 Kenyan shillings in the previous year, the statement said. GCPL's Africa business has annualised revenue of about $200 million.
Canon makes products such as petroleum jelly, lotions, air fresheners, detergent and candles. A major part of its revenue comes from petroleum jelly. Established in 1974, Canon also exports its items to Tanzania, Uganda, Rwanda, Sudan and some other African countries.
The deal reflects GCPL’s commitment to scaling up its presence in Africa, GCPL managing director Vivek Gambhir said in the statement.
Gambhir had earlier told VCCircle that the company was looking at large-sized transactions in Africa.
The Mumbai-based company has previously made several other acquisitions overseas.
Last year, the firm bought the 40 per cent stake it didn’t already own in Chilean hair colour cosmetics company Cosmetica Nacional for an undisclosed amount.
In 2015, GCPL agreed to acquire the hair extension business of the South Africa-based Frika Hair (Pty) Ltd for an undisclosed amount. In February last year, it signed an agreement with the African hair care company Darling Group Holdings to hike its stake in its two entities in South Africa and Mozambique to 90 per cent.
Besides hair care products, GCPL makes household and other personal care products under brands including Good Knight, Cinthol, Godrej No. 1, Hit, Fairglow, Ezee and Protekt.
One of GCPL’s investors is Temasek. In 2012, The Singapore government’s investment unit had invested Rs 685 crore ($135 million then) to buy a 4.9 per cent stake in GCPL in what was the single-largest alternative investment deal in the Indian FMCG industry. Temasek sold part of its stake in GCPL last quarter.
