Emami, Marico, Wipro eye Paras Pharma's Rs 100-crore personal care business from Reckitt Benckiser

KOLKATA/NEW DELHI: Indian consumer goods makers Emami, Marico and Wipro Consumer are in the final lap to acquire Paras Pharma's 100-crore personal care business from Reckitt Benckiser, three people close to the development said. The business-which includes Livon hair conditioner and hair tonic, Borosoft antiseptic cream, Set Wet hair styling products and Zatak deodorant-is likely to be valued at around 800-900 crore, they said on condition of anonymity. Emami Executive Chairman RS Agarwal confirmed the Kolkata-based company's interest. "We are looking at it very seriously," he said, adding that his company is undertaking the due diligence of Paras brands. Marico Chairman and MD Harsh Mariwala said, "We keep on looking at various targets and won't be able to comment on any specific one." A Wipro spokesperson too refused to comment. Two other original suitors, Dabur and Godrej Consumer Products, dropped out of the race due to high valuation. That too at a time when there is a slowdown in the overall economic activity. Dabur India Group Director PD Narang confirmed that his company is not participating in the bidding, the first stage of which concluded late last week. Morgan Stanley is managing the deal for Reckitt Benckiser. A spokeswoman said Reckitt Benckiser does not comment on speculations. The UK-based maker of Dettol antiseptic, Harpic toilet cleaner and Mortein mosquito repellant had bought Paras Pharmaceuticals for 3,260 crore last December in the one of the largest deals in the Indian FMCG space. After internal reviews, industry insiders say, it decided to focus on Paras' healthcare brands such as Moov pain reliever, D'Cold flu and cold drug, Dermicool prickly heat powder, Krack foot cream and Itch Guard and Ring Guard anti fungal creams, and sell off its personal care brands. Paras' health-care business is estimated at 300-350 crore. While Reckitt Benckiser is eyeing a valuation of 1,000 crore for Paras' personal care business, a senior official of one of the bidding companies said the deal is likely to be sealed at a lower price. "Except Livon, which is a market leader in the hair tonic segment, most of the other brands are performing average. The deal may be sealed at a lower price than what Reckitt Benckiser was initially expecting," the person said. The personal care product market in India is estimated at 30,000 crore, growing 18-20% a year, driven by rising incomes and aspirations, increasing awareness and widening reach of marketers make more and more people use personal care products ranging from shampoos and handwash to deodorants and hair gels. While there is a strong presence of multinationals led by market leader Hindustan Unilever and Procter & Gamble, Indian companies have been scouting for buyout opportunities to grow their business both within the country and elsewhere through niche products. In fact, Emami-which bought Zandu Pharmaceuticals three years ago for around 700 crore-gave a close fight to Reckitt Benckiser in the race for Paras Pharmaceuticals last year. This time Emami has roped in JP Morgan, which helped Reckitt clinch the Paras deal last year. That was the last big deal in the 1,30,000-crore Indian FMCG market where recent M&A talks have mostly failed due to differences in valuations at a time when rising costs, economic slowdown and intense competition are squeezing FMCG companies' margins.