This forms part of Wipro’s String of Pearls strategy, which envisages the acquisition of smaller companies to access diverse markets.
BANGALORE: In a move that is expected to double its personal-care products market, Wipro Ltd has bought Singapore’s fast moving consumer goods (FMCG) product firm Unza Holding Ltd in an all-cash deal for Rs 1,025 crore ($250 million).
This forms part of Wipro’s String of Pearls strategy, which envisages the acquisition of smaller companies to access diverse markets.
The third-largest software company, which earns around Rs 800 crore (close to 5% of its total revenue of Rs 15,000 crore) from its consumer care, lighting and furniture unit, will complete the transaction by month-end.
The acquisition will be funded through internal accrual. Wirpo Consumer Care and Lighting president Vineet Agarwal said that revenues will start flowing into the company from the second quarter of this fiscal itself and the acquisition will push it among the top seven players in the over Rs 56,000 crore FMCG industry. Today, Wipro Consumer is not even in the top 10 Indian FMCG companies.
Unza’s annual turnover for the year-ended April 30, 2007, was Rs 683 crore. It grew 14% in dollar terms, well ahead of the market growth in the southeast Asian region.
“We have not yet decided which Indian brands will be taken and which would be brought into India,” said Agarwal. Unza has presence in 40 countries, with five manufacturing facilities on Malaysia, Vietnam, China and Indonesia. It is the third-largest toiletries seller in Malaysia and ranks among the top 10 in Singapore.
Wipro Consumer Care and Lighting general manager, new business development, Nagendra Arya, said there would no change in the current management of Unza.
“For now, Unza will be operated as it is. The present management will continue. We will look at what synergy can be derived from the company. We are looking at the financial integration of the two companies, whereby the financial year of Unza (which ended on April 30) will be aligned with ours (which ended on March 31),” said Arya.
And with its operating margin at 12%, Agarwal said Wipro does not face any hazard of margin dilution.
Unza Holding Ltd regional director, East Asia, Poul Henrik Vagtborg, said that, besides the Rs 202.50 crore ($50 million) debt, there were no other major liabilities on the books of Unza.
Agarwal said that Unza would give it a reach to the markets similar to India like Vietnam, Indonesia and Nigeria, where it could distribute its soap bar brands like Santoor, sales of which was 25% in India last year.
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