Godrej Consumer Sells U.K. Business For £34 Million
Godrej Consumer Products Ltd. sold its U.K. business to JZ International Ltd. for £34 million (around Rs 310 crore), as part of efforts to sharpen its focus on Asian, African, and Latin American markets.
"As we build on our presence in these emerging markets and sharpen our strategic focus, we have decided to divest our U.K. business," Godrej Consumer Products Chairperson Nisaba Godrej said in the press release.
Godrej U.K. was the company's first international acquisition 13 years ago, and had brands including Touch of Silver, Cuticura and Soft & Gentle.
The decision to sell the U.K. business was in-line with “our long-term objective of continually optimising our portfolio and making the appropriate capital allocation choices to drive superior value creation", the chairperson added.
Godrej Consumer's U.K. business contributed five percent of its Rs 9,862-crore net sales in the financial year 2017-18. International operations as a whole accounted for 47 percent of sales.
Analysts welcomed Godrej Consumer Product’s decision to sell the U.K. business to the London-based private investment firm.
"This divestment, while small, will help boost the international business’ return of capital employed, which is around half of sales but has less than 10 percent of ROCE," said Gautam Duggad, head of research at Motilal Oswal Financial Services Ltd.
"The business was not growing as fast as other geographies and also had lower margins; that could be one of the main reasons to sell the U.K. business," Sachin Bobade, a senior research analyst at Dolat Capital Market Pvt. Ltd. told BloombergQuint.