Tata Consumer to acquire Bisleri for around Rs. 7,000 crore
25 Nov 2022
Bisleri International, India's largest packaged water company, is set to be acquired by Tata Consumer Products Ltd (TCPL). The Tata Group company will reportedly pay Rs. 6,000-7,000 crore for Bisleri. Veteran industrialist Ramesh Chauhan, the owner of Bisleri, has decided to sell the company for lack of a successor. Several companies including Reliance Retail, Nestle, and Danone were in talks with Chauhan.
Why does this story matter?
Bisleri is synonymous with packaged drinking water in India. With its acquisition, TCPL will be catapulted to the top of the segment. It already sells water under the Himalayan brand and Tata Copper Plus Water. It will also help TCPL's FMCG aspirations. The question here is, is TCPL overpaying for Bisleri? It seems that the valuation was mainly based on the goodwill of Bisleri.
Why is Chauhan selling Biselri?
Chauhan, 82, hasn't been at the forefront of Bisleri for a while now. He handed over the day-to-day business of the company to a group of professionals headed by CEO Angelo George. His daughter Jayanti is not keen on taking over the business. The lack of a successor and indifferent health are two factors that led Chauhan to sell Bisleri.
Tata Group will nurture and take care of Bisleri: Chauhan
Bisleri's current management will continue for two years as part of the deal. Chauhan said that selling Bisleri was a "painful decision." He said the Tata Group "will nurture and take care of it even better." "I like the Tata culture of values and integrity and hence made up my mind despite the aggression shown by other interested buyers," he added.
Bisleri's estimated profit in FY23 is Rs. 220 crore
Bisleri's estimated FY23 turnover is Rs. 2,500 crore with a profit of Rs. 220 crore. In the year ended in March, the company's income from sales was Rs. 1,181.7 crore with a profit of Rs. 95 crore.
The deal wasn't about money: Chauhan
"Even I don't know what I will do with it (the money) but let me make it clear. It was not just the value I am getting for it, I was more anxious to find a home that would look after it as I did," said Chauhan. "This is a business I have built with passion," he told The Economic Times.
Chauhan won't hold a minortiy stake
Chauhan won't hold any minority stake in Bisleri. He said, "What will I do with it when I am not running the show?" Once he is done with Bisleri, he intends to invest and focus on environmental and charitable causes such as water harvesting, plastic recycling, and helping the poor get medical care.
Bisleri was originally an Italian brand
Bisleri was originally an Italian company that was established in 1965 in Mumbai. Chauhan and his brother acquired it in 1969. This is not the first time Chauhan is selling his business. In 1993, Coca-Cola bought Chauhan and his brother's entire aerated drinks business, including brands such as Thumbs Up, Gold Spot, Limca, Citral, RimZim, and Maaza.