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Rediff.com  » Business » 'Godrej unlikely to buy Sara Lee's household products biz'

'Godrej unlikely to buy Sara Lee's household products biz'

December 21, 2009 19:17 IST

Adi GodrejGodrej Consumer Products Ltd (GCPL) is unlikely to join the race to acquire US-based Sara Lee's household products business as it would face stiff competition from global companies like Procter & Gamble and Unilever, according to market analysts.

"If at all Godrej plans to buy out the global household business of Sara Lee, there will be strong competition from multinationals like Unilever and P&G. So, it is unlikely that GCPL will go ahead with it," a research analyst from Religare Capital Markets said.

What has been indicated is that Godrej is more interested in the Indian business. Their priority right now would be on buying out Sara Lee's stake in their joint venture, he added.

Godrej is in the process of buying out the 51 per cent stake of the US partner from their JV, Godrej Sara Lee and could be spending close to Rs 800 crore (Rs 8 billion) out of Rs 3,000 crore (Rs 30 billion) that GCPL's board had recently approved to raise.

Another analyst with a Mumbai-based brokerage firm, who asked not to be identified, said: "GCPL will be more interested in developing markets like Indonesia, Malaysia as besides India household insecticides do well there only."

When contacted, GCPL Managing Director Dalip Sehgal declined to comment specifically on plans to acquire Sara Lee's international household products business.

"We are evaluating acquisition opportunities internationally. We would be interested in the household insecticide businesses in developing markets," he said.

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