FMCG giant Dabur completes acquisition of 51 percent majority stake in Badshah Masala

Dabur India Ltd stated in a stock exchange filing that it has completed its acquisition of a majority stake of 51 percent in Badshah Masala Private Ltd. The firm said that the acquisition has happened upon the fulfilment of terms and conditions pursuant to the “Share Purchase Agreement (“SPA”) and Shareholders Agreement (“SHA”) executed by Dabur India Limited (“Dabur” or “Company”) with the existing Promoters and Shareholders of Badshah”, as per the filing. Now, Badshah Masala has become a subsidiary of Dabur India, with effect from 2 January 2023. Dabur Group Director P D Narang had stated in a release that the company will acquire the rest of the 49 percent stake in Badshah Masala after five years.

Badshah Masala contains a total of 80,000 distributors and Dabur India aims to leverage its larger distribution network for the brand’s expansion. After news of the deal first broke, Dabur CEO Mohit Malhotra, had said on 27 October, “We have the vision to extend our beverage portfolio to food and beverage portfolio and the acquisition is an attempt in that direction.” He added that they have a 70 percent market share in their beverage sector, however, now they want to extend this to food as well. Malhotra had said that Badshah Masala is going to operate as a standalone entity and the promoter Hemant Jhaveri would retain the managing director role.

Dabur India is a large-cap company and operates in India’s Fast Moving Consumer Goods (FMCG) industry. The acquisition comes at a time when the rival FMCG majors like Tata Consumer Products and ITC are also vying for a stake in the spices and seasoning segment. Tata Consumer Products is making the bid via its brand Tata Sampann, while the ITC has its brand Aashirvaad. A report by Avendus Capital states that the spices market in India is valued at Rs 70,000 crore in which the branded spices account for 35 percent share.

At present, Dabur operates in key consumer product categories such as health care, hair care, oral care, home care, skin care, and foods. The ayurvedic firm has a wide distribution network, covering 6.7 million retail outlets. The company has a high penetration in both urban and rural markets. According to the corporation’s official website, Dabur India is the fourth largest FMCG company in India.

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