The workshop was conducted by Mr.Shailendra Katyal, Category Head, Marcio Ltd.
In 2006, the brand Nihar (coconut air oil & perfumed coconut hair oil) was acquired from HUL by Marico Limited – a Mumbai based FMCG Company which also owns a similar brand, Parachute. The deal was worth about Rs.240 crores and was one of the largest brand deals made by an Indian company. Mr. Shailendra Katyal was one of the key individuals involved in the processes of acquisition of Nihar from HUL and integration of Nihar into Marico.
Mr. Katyal started by emphasizing on how strategic decisions are taken by firms in acquiring a brand, valuing it and the challenges in integrating it into the firm's business. Organizations go for acquisitions so as to derive strategic benefits of growth (geographic reach & market share), to extend the breadth and depth of product lines, to overcome competition or for operational efficiency. Various types of valuation methods and the other dynamics involved in brand acquisition beyond the price factor were discussed.
Narrating the story of Nihar, he spoke about how Marico (with Parachute) and HUL (with Nihar) were amidst intense rivalry since 1997 in the coconut hair oil market. Marico with aggressive strategies and strong entrepreneurial culture was able to ward off the challenge. Finally in 2006, HUL as part of its 'Power Brands' strategy decided to divest Nihar, because as a brand, Nihar only had a strong regional focus in eastern India. Subsequently Marico acquired Nihar, but it faced unique challenges in integration as both Parachute and Nihar compete for the same market and are very similar products.
Marico, with planning of short term and long term objectives was successful in integrating Nihar and attain significant growth in the segment. Mr Katyal explained why managing the time to market and managing the turmoil in the distribution channels during the change of ownership of Nihar to Marico was identified as key areas that required quick and focused planning.
The session concluded with a question and answer session in which Mr. Shailendra answered probing questions raised by students on various decisions. In response to queries, he elaborated on how Parachute and Nihar were offered as differentiated products to consumers so as to manage portfolio conflicts.
