P&G, Marico race to buy Paras Pharma

           There’s a new twist to the ongoing race to acquire the Rs 500-crore Paras Pharmaceuticals in domestic markets. Even as Emami is leading the race for Paras, Procter & Gamble Hygiene and Health Care (PGHHCL) and Marico have joined the fray. At present, Paras Pharmaceuticals’ OTC (over-the-counter) brands include Moov, D’Cold Total, Krack and Dermi Cool among others. Incidentally, pharma majors such as Cipla and Piramal Healthcare are also interested in acquiring Paras Pharma’s OTC brands to extend their product portfolio.The race for Paras Pharma is hotting up with new companies jumping into the fray.

“With increasing competition, the valuations of the Paras Pharma has gone up to Rs 3,250 crore in the last few days. Despite the high valuation of Paras, many companies are keen to acquire the company’s OTC brands,” said an industry analyst based in Mumbai. Meanwhile, FMCG major Jyothi Laboratories is in advanced talks with Bengal-based Safechem Industries(makers of Safed) to acquire its detergent brands. In essence, the Rs 1.2- lakh crore Indian FMCG industry will witness a spate of acquisitions in the next few months.

According to industry analysts, PGHHCL has been looking at acquisition opportunities in consumer health care space for quite some time.” Paras Pharma’s OITC brands will have a strategic fit in P&G health care portfolio which includes Vicks,” said an analyst in Mumbai. 

When contacted by FE, Tapan Buch, chief financial officer, P&G India, said: “As per our company policy, we do not comment on strategy or future plans.” Meanwhile, Emami a key contender for Paras Pharma has just got its board’s approval to raise Rs 5,000 crore through debt and equity dilution-a clear signal that Emami is looking at a big ticket acquisition in the near future. In fact, the company has recently moved a special resolution in this regard. After its acquisition of Zandu Phrama two years ago, Emami is now keen to acquire controlling stake in Paras Pharma. Aditiya Agarwal, director of Emami, who is currently holidaying in Thailand, was reluctant to comment on his company acquisition plans.

Yet another FMCG major Marico is also in talks with Paras Pharma to acquire its OTC brands. Like P&G, Marico has been scouting for acuqitions in domestic market for quite some time. Chaitanya Deshmukh, head of Mergers &Acquisitions, Marico said, “As you might expect, Marico cannot either confirm or deny queries on this.”