Financial Daily from THE HINDU group of publications
Saturday, Oct 08, 2005
Corporate - Mergers & Acquisitions
Reckitt swallows Boots' drug unit for $3.4 b Agreement with Boots Piramal to continue: Swati Piramal
P.T. Jyothi Datta
Mumbai/Delhi , Oct. 7
THEY had gone their separate ways in 2001, when household products major Reckitt Benckiser Plc and pharma company Nicholas Piramal India Ltd (NPIL) dissolved their joint-venture company in India.
But a global deal on Friday has brought the two companies back to the table in India, this time over the fate of Boots Piramal Healthcare Private Ltd.
"Reckitt is somebody we have worked with in the past and we still sell some of their products in India. We have an agreement with Boots Piramal, which will continue till both parties decide or want to change it. It depends on what the new team wants," Nicholas Piramal India's Dr Swati Piramal told Business Line.
She was responding to a query on the future of Boots Piramal in India, following Reckitt Benckiser Plc's decision to buy Boots group's non-prescription drugs business for £1.926 billion (Rs 15,000 crore) in cash.
Dr Piramal said NPIL had a 10-year agreement with Boots, with a couple of years still to go. NPIL also markets two major Reckitt brands - Gaviscon to treat heartburn during pregnancy and Fybogel for constipation.
Reckitt Benckiser officials in India, however, did not want to comment on the deal.
Boots Piramal is a 51:49 joint venture between Boots Plc and NPIL.
The company saw its net sales decline by 14.5 per cent to Rs 65 crore in the financial year 2005.
Some of the products sold by the joint venture include popular brand names such as Aspro, Saridon and Lactocalamine from the NPIL stable and Sweetex, Clearasil and Strepsils from Boots.
According to a source in Boots Piramal, no clarity has yet emerged on the Indian operations. The company has about 145 people working in the country, he said.
Recently, the Indian Chief Executive Officer, Mr Abhijit Sanyal, had quit and Mr Don Lehman was the acting CEO, he said.
In 2001, Reckitt and NPIL dissolved their existing joint venture stating that the two companies could achieve their objective cost effectively without the incremental costs associated with the joint venture.
Reckitt Benckiser Plc and NPIL held 40 per cent equity each in the erstwhile Reckitt Piramal Ltd. Reckitt Benckiser India Ltd held the remaining 20 per cent.
Sans the trappings of a company, the two entities had decided to continue their "strategic alliance" with NPIL supporting the doctor detailing for Reckitt's Dettol and Disprin.
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