Hindustan Unilever Seeks CCI’s Nod To Acquire Minimalist
Hindustan Unilever seeks CCI’s nod to acquire Minimalist
Aiming for synergies in beauty and personal care product markets, the deal is worth Rs 2,670 crore
Hindustan Unilever Ltd (HUL) has sought clearance from the Competition Commission of India (CCI) to acquire a 90.5 percent stake in Uprising Science Pvt Ltd, the parent company of Minimalist.
Initially, the company will infuse Rs.45 crore with an eventual acquisition of the remaining 9.5 percent shareholding. It comprises a secondary buyout for a cash consideration of Rs.2,670 crore at a pre- money enterprise valuation of Rs.2,955 crore.
The fair-trade regulator stated, "The acquirer (HUL) proposes 90.5 percent shareholding of the target (Uprising Science), with an eventual acquisition of the remaining 9.5 percent shareholding, in two years from the completion date. This is as per the terms in the share purchase and subscription agreement executed by and between the parties.”
A leading FMCG player, Hindustan Unilever owns over 50 brands, including Lakme, Lux, Knorr, Kwality Wall's and Surf Excel.
On the other hand, Jaipur-based Uprising Science manufactures and sells beauty and personal care products and baby care and hair care items, under the brand name 'Minimalist'.
The proposed transaction was notified under Section 6(2) and Section 5(a) of the Competition Act, 2002.
Section 6(2) relates to a person or enterprise to notify the regulator before entering a combination. Section 5(a) defines a combination as buying one or more enterprises or a merger exceeding a certain threshold.
In its submission, Hindustan Unilever said the transaction would not lead to any adverse effect on market competition – leaving the relevant market definition open.
The FMCG major stated that though the companies operated in overlapping segments, the transaction was unlikely to alter competitive dynamics. They had identified key markets relevant to the deal, including manufacturing and selling beauty and personal care, skincare, and hair care products in the country.
The companies outlined potential vertical linkages and common aspects arising from the deal. These include manufacturing and sale of beauty and personal care products and their distribution through beauty salons across India.
However, the CCI will assess the transaction to determine its impact on competition before approval. The regulatory body examines such deals to ensure consumers’ interests and competition facets.
