Emami enters into share purchase agreement with Zandu promoters

Company Brief

Kolkata, October 16, 2008

Zandu Pharmaceutical Works Ltd., their Promoters and Emami Ltd. are pleased to announce that they have entered into an Share Purchase Agreement for certain shares owned by the existing promoter group of Zandu, the Parikh family, to Emami. As a result of this agreement, Emami has purchased an additional 18.18 percent of Zandu and will become its largest shareholder, and this transaction effectively paves the way for Emami’s acquisition of Zandu.  The consideration received by the Parikh family is Rs.15,000 per share and a non-compete fee of Rs. 22 cr.

Commenting on the transaction, Mr. Harsh V Agarwal, Director of Emami said, “We are excited to unite our people, brands and processes with Zandu and complete this transaction, especially at a time when panic and pessimism in the global financial markets have forced our competitors to act defensively. We view this transaction as an important step in the growth of Emami and believe that Zandu’s product line will provide us with opportunities in markets in India and across the world.  The marriage of Zandu and Emami will change the landscape of the consumer products sector in India.”

The Managing Director of Zandu, Mr. Girish G Parikh, added, “I am happy with the arrangement and feel confident that the shareholders of both companies will derive maximum benefit from this consolidation. As both companies have much in common relating to innovative product development based on the holistic healing system of ayurveda, I am certain that this transaction will lead to further enhancement of operational efficiency and will significantly contribute to the growth of Zandu and Emami. Since both companies have a rich heritage and experience, by joining hands they will now be better poised to exploit the emerging opportunities”.  

Consumers across India will benefit from both companies’ strong brand recognition, powerful distribution channels and efficient supply-chain management and marketing strategies.  This transaction is expected to be earnings accretive to Emami’s shareholders in the long term, given potential synergies in revenues as well as in selling, general and administrative expenses.  Emami stands committed in upholding Zandu’s brand equity, business ethics and corporate philosophy. Furthermore, both Emami and Zandu enjoy a commonality of cultural, ethical values and product development.

Anand Rathi Financial Services Ltd acted as exclusive financial advisor to Emami on this transaction.  Antique Financial Services Ltd. acted as financial advisor to the Parikh Family.

Kanga & Co acted as legal advisors for the Emami group and the Parikh family was represented by AZB & Partners

For further information, please contact:

Vaishnavi Corporate Communications

Uzzal Mohan

Mobile: 92462 15332

Email: Umohan@vccpl.com