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Marico in talks to buy 51% in Unibic India
Marico has emerged as the front runner for buying 51% stake in Unibic India for an
estimated offer price of ~`130cr. The other companies in the foray include GSK Consumer
and Pepsico. Marico will acquire the remaining 49% of Unibic India after four years and will
retain Unibic’s brand for some time. While managements of Marico and Unibic India
declined to comment, the market is rife with the speculation that the acquisition is expected
to be completed by January end.
Unibic India came to existence in 2004. The company's best selling brands are Chocolate
Chip cookies, Oatmeal cookies, Butter, Cashew, Coconut and Jamz cookies. The company
recently launched a variety of sugar-free cookies in three flavours: butter, cashew and
oatmeal. The company is also slated to launch Chyawanprash biscuits in the near future.
Unibic India has a market share of ~10% and has a turnover of `60cr–70cr.
While there are no further details of the deal, we believe the deal will mark Marico’s entry in
the premium cookie segment. We recall Marico had tried its hand earlier with the foods
category by launching Saffola Zest, but it had failed. The deal is valued at ~4x sales of
Unibic India and is expensive in our opinion. We maintain Accumulate on the stock with a
Target Price of `136.
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