Buyout of Paras by Reckitt Benckiser

Buyout of Paras by Reckitt Benckiser
Case Code: BSTR390
Case Length: 27 Pages
Period: 2010-2011
Pub Date: 2011
Teaching Note: Not Available
Price: Rs.500
Organization: Reckitt Benckiser Group Plc, Paras Pharmaceuticals Limited
Industry: Fast Moving Consumer Goods
Countries: UK, India, Global
Themes: Merger and Acquisition, Business Strategy
Buyout of Paras by Reckitt Benckiser
Abstract Case Intro 1 Case Intro 2 Excerpts

"The Paras brands are well known throughout India. They include products that many Indian consumers know and love. Combined with RB's investment, global innovation, and distribution capabilities, the Paras health care portfolio gives RB a platform for exciting new growth in India, in addition to attractive cost synergies. Girish Patel has created a set of highly successful and admired brands in the Indian market and we will build upon his success."

- Chander Mohan Sethi, Chairman & Managing Director, Reckitt Benckiser (India) Ltd., in December, 2010

"Entrepreneurs now realize the real worth of what they've built. There is a strong desire to monetize what they own. With globalization, overseas buyers are willing to open the purse strings where they see value."

- Raman Roy, Chairman & Managing Director, Quattro, in December, 2010

Uk-Based FMCG Major Buys Paras

On December 13, 2010, Reckitt Benckiser Group Plc (RB), the world's largest producer of household products and a major player in health and personal care products, achieved a major coup when it announced a deal with Paras Pharmaceuticals Limited (Paras), the leading company in Over-The-Counter (OTC) and health and personal care products in India. Under this deal, RB acquired a 100% stake in the privately held Paras for US$ 726 million.

According to experts, acquiring Paras and its leading brands was no easy task as it was a case of there being 'more suitors than brides'. The acquisition war for Paras went on for more than three months between renowned multinational companies such as Bayer AG , Colgate-Palmolive Company GlaxoSmithKline Plc (GSK), Johnson & Johnson (J&J), Merck & Co., Inc. ,Novartis International AG, Sanofi-Aventis , and Taisho Pharmaceutical Co., Ltd. . Some Indian companies including the Emami Group (Emami), Dabur India Limited , and Marico Limited also fought to get their hands on Paras. However, RB emerged as the most preferred suitor in the final bidding process, pipping front-runner Emami. On the successful acquisition of Paras, Bart Becht (Becht), CEO of RB, said, "It creates a material healthcare business in India, one of the most promising healthcare markets in the world with the addition of number of strong and leading brands." Industry experts said it was the second largest deal in Indian pharma industry in 2010 after Abbott Laboratories' (Abbott) US$ 3.72 billion acquisition of Piramal Healthcare Limited (Piramal)...

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