Hindustan Foods to acquire Reckitt Benckiser's Baddi manufacturing plant; stock spurts ~5%

16 Dec 2022 , 09:56 AM

In order to further expand its Health Care & Wellness division, Hindustan Foods Limited has executed a Business Transfer Agreement for the acquisition of Reckitt Benckiser Health India Private Limited’s manufacturing facility in Village Sandholi, Baddi, Himachal Pradesh.

The transfer of the Undertaking is expected to be completed by H2 of the calendar year 2023, subject to the fulfillment of the conditions precedent set forth in the BTA.

This acquisition, when completed, will expand the company’s offerings in the OTC Healthcare and Wellness segment.

The manufacturing facility produces a wide range of OTC health and wellness products and skin creams, including some of Reckitt Benckiser’s key products. It is a cutting-edge facility with cutting-edge equipment and machinery that meets global standards and adheres to USFDA & MHRA, Russia GMP norms.

All employees related to the Sale Business as defined by BTA will be transferred to HFL as part of the acquisition with job continuity.

Upon completion, HFL would manufacture a variety of products for Reckitt and its affiliates in India and around the world. The acquisition also gives HFL the opportunity to better utilise idle capacity and generate incremental profits.

This is the company’s second acquisition in the OTC Healthcare and Wellness segment. Previously, HFL acquired shares in an entity with a manufacturing facility in Sriperumbudur, Tamil Nadu (refer to our January 24, 2022 disclosure) and marked its entry into the OTC Healthcare and Wellness Segment.

At around 9.32 AM, Hindustan Foods was trading at Rs730.60 up by 4.99% from its previous closing of Rs695.85 on the BSE. The scrip opened at Rs721 and touched an intraday high and low of Rs730.60 and Rs711.40 respectively.

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