Godrej Consumer shrs rise after brand acquisition by UK arm

Moneycontrol Bureau

Godrej Consumer Products shares rose over 1 percent in morning trade on Tuesday after the fast consumer goods major announced its UK subsidiary Keyline has acquired Soft & Gentle, UK's fourth largest female deodorant brand by market share, from Colgate-Palmolive.

"The acquisition of Soft & Gentle by Keyline Brands will add profitable scale to our UK business. Over the last few years, Keyline brands has delivered good performance and grown in double digits in a very tough market environment that is witnessing little or no growth," said GCPL Chairman Adi Godrej.

Godrej expects this acquisition to be accretive in year one and is optimistic that the UK business will continue to outperform the market.

Over the last several years, Godrej Consumer has made several acquisitions around the world, which include Megasari in Indonesia, The Darling Group in Africa, Kinky and Rapidol in South Africa, Tura in Nigeria and Argencos and Issue in Latin America. Its been focusing on 3x3 strategy -- home care, hair care and personal wash in Asia, Africa and Latin America.

Godrej is confident that its thrust on driving that strategy will help the company further accelerate performance trajectory in the future.

For its Keyline business the company will look to "selectively bolt on brands that are strategic, financially accretive and provide significant synergies."

"The brand (Soft & Gentle) was launched for the UK market in 1976...We believe we can use the strong latent brand equity combined with updating the fragnance technology, developing further range extensions within the female personal care category and creating an integrated above the line support campaign to engage consumers and drive strong growth for the brand," Anand Rangaswamy, MD, Keyline Brands, said.

At 10:00 hrs, GCPL shares were up about 0.7 percent at Rs 726.90 on NSE.