BackGodrej Hershey in talks with Emami, others to sell Jumpin, XS brands
Godrej Hershey in talks with Emami, others to sell Jumpin, XS brands
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New Delhi: Food and beverages firm Godrej Hershey Beverages and Food Ltd is in talks with Kolkata-based consumer goods company Emami Ltd to sell its non-carbonated beverage brands Jumpin and XS.
Godrej is holding discussions with several prospective buyers for the brands.
“Yes, we are talking to buy the two brands, but cannot disclose any details as some preliminary discussions have only happened so far," said a senior Emami executive who did not want to be identified. “But, yes, we are considering buying."
Godrej did not respond to queries sent by Mint.
According to at least three people aware of the development, Godrej is willing to sell the two brands for around Rs85 crore for which Yes Bank is preparing the mandate. The bank has the mandate to sell the non-core brands, including edible oil, tea and non-carbonated drinks.
However, according to industry experts, Godrej might not be able to sell the brands at such a high price.
“These brands are already dead and out. No one remembers them now and the price that Godrej is asking is also very high," said an executive of a company which was also approached.
Godrej had also held some rounds of discussions with Dabur India Ltd, but Dabur did not take it forward.
“Yes Bank had also approached Future Group," said another person close to the development. However, when contacted by Mint, Future Group chairman Kishore Biyani said the firm was not considering buying Godrej brands.
According to estimates, Jumpin and XS put together contribute around Rs55 crore to Godrej Hershey’s kitty. Another brand in the portfolio called Sofit soyamilk has a turnover of Rs5-7 crore. Other than the brands, the total valuation of the plant comes to around Rs30 crore.
“The total enterprise value can be estimated at about Rs85-90 crore, but not that much amount only for two brands," said one of the persons.
In September, Godrej Group chairman Adi Godrej had said at a media briefing that the group was looking at selling its non-core businesses, including the food business, and concentrate more on personal care and household products.
Godrej Hershey is a joint venture between The Hershey Co., North America’s leading chocolate and confectionery manufacturer, and Godrej Beverages and Foods Ltd. In 2007, the two firms announced the venture, in which Hershey holds 51%. The joint venture firm has a tetrapak unit near Bhopal in Madhya Pradesh, where it manufactures Jumpin, XS and Sofit, apart from undertaking co-packing for other companies.
Godrej Hershey has an aggressive growth agenda and plans to become a leading player in the food and beverage space in India. “We are targeting sales revenue of Rs1,000 crore by the year 2010 through organic as well as inorganic growth," it says on its website.
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