The board of Patanjali Foods Limited (PFL) on Monday approved the proposal of Patanjali Ayurved Limited to acquire its Home and Personal Care (HPC) business, accelerating the company’s transition into a leading FMCG firm.

The transfer of the HPC business has been mutually negotiated between the Company and PAL for a lump sum consideration of Rs 11,00,00,00,000 (Rupees Eleven Hundred Crores only) which shall be subject to customary closing date adjustments and on such other terms as set out in the business transfer agreement to be executed between the Company and PAL, Patanjali Foods said.

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Separately, a 20-year licensing arrangement for a 3 % turnover based fee along with other conditions has been agreed between the Company and PAL.

The Home and Personal Care business of Patanjali Ayurved presently caters to four key segments being dental care, skin care, home care, and hair care.

This strategic initiative for acquisition of HPC business shall strengthen the company’s existing FMCG product portfolio with an array of marquee brands and also contribute to the growth in terms of revenue and EBITDA, Patanjali Foods said in a statement.

PFL prepares to acquire the entire HPC Business of PAL on a going concern basis, and includes all the assets and liabilities attributable to the business, relevant employees, distribution network, contracts, licenses, permits, consents, and approvals integral to this operation.

The company also acknowledges the value of the intellectual properties of the HPC Business’ product portfolio and its market importance.

Accordingly, the company and PAL have also agreed to enter into a licensing agreement permitting the company to use the trademarks and associated intellectual property rights, owned by PAL, that relate to the product portfolio of the HPC Business.

The acquisition will lead to a consolidation of ‘Patanjali’ brand FMCG products portfolio. The acquisition will bring along with it multiple key synergies in terms of brand equity and enhancements, product innovations, cost optimisation, infrastructure & operational efficiencies and positive impact on market share.

With this acquisition, the company also informed that it has reaffirmed its position to be a strong FMCG company in its journey towards becoming a major player in the FMCG space as committed to its shareholders at the time of its maiden FPO.

Pursuant to the approval of the Board of PFL, the Company shall now take necessary steps to execute the definite agreements in connection with the acquisition as well as apply for necessary approvals integral to the transaction.