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After Marico’s Paras personal care acquisition, ad duties expected to move

16-February-2012
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After Marico’s Paras personal care acquisition, ad duties expected to move

Within barely 10 months of Reckitt Benckiser acquiring Paras Pharmaceuticals, the former has agreed to sell the personal care brands under Paras to Marico Limited, one of India’s leading consumer products and services group in the beauty and wellness space. Some of the brands included in this are Set Wet, Livon and Zatak amongst others.

The transaction envisages transfer of all key assets including intellectual property rights, supply agreements and third party manufacturing agreements (Paras PC business) for an undisclosed consideration. These assets are in the process of being transferred to a separate company in which Marico will acquire 100 per cent shares. The transaction is expected to conclude by second quarter of 2012.

Soon after the announcement of the acquisition that was made on February 15, 2012, the industry was abuzz with the likely impact of this development on the advertising duties of Paras PC products. At present, Paras’ PC business rests with Cut the Crap. The agency was awarded this business, following a multiagency pitch process. Cut the Crap has handled Paras PC products even before Reckitt Benckiser bought the company in April 2011.

While there is no clarity on whether another takeover will impact the creative part of the business, it is understood that the media duties are likely to see a shift from ZenithOptimedia to Madison Media, which at present is the media AoR for Marico Ltd.

Marico or Paras officials did not respond to exchange4media’s queries on possible shift of ad duties till the time of filing the report.

The Paras PC business, according to an official release, is expected to achieve a turnover of over Rs 150 crore during FY12. Brands in the portfolio give Marico an opportunity to participate in the rapidly growing deodorant and male grooming categories in India. Marico will leverage its distribution strength to provide a fillip to the growth of the brands. The acquisition of this business is expected to further reduce Marico’s dependence on edibles oils and hair oils.

“I am excited about this acquisition. It fast-forwards our journey towards creating a portfolio for the future with a significant presence in the male grooming and post wash hair care segments,” said Saugata Gupta, CEO, Consumer Products Business, Marico, in a press statement
Milind Sarwate, Group CFO and CHRO, Marico, added, “This strategic acquisition is a significant building block for value creation for Marico shareholders through profitable sustainable growth over the long term. We will fund the acquisition through a judicious mix of internal accruals, equity and debt.”


 

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