The deal would be valued at aroundRs. 5.7 billion (the deal amount includes debt). Despite the news, stock price for the company were down on Friday as the company would take a debt of around Rs. 4,540 million.
On Friday at 11:49 A.M ISTon the Bombay Stock Exchange (BSE), stocks of the firm were trading at Rs. 215.25, down by 3.06 per cent or by Rs. 6.80. The stock had seen an intraday high of Rs 226.65 and a low of Rs. 211.00, till then.
Back in March 2011, the company had acquired a 14.9 per cent stake in the loss making company (Henkel) from its Indian promoter Tamil Nadu Petro-products Ltd. for around Rs. 607 million. Now, Jyothy has agreed to shell out Rs. 20 per share for 59 million shares of Henkel India.In the process Jyothy will pay Rs. 1,187 million for the stake and finance the rest, this would now increaseJyothy'sshare in Henkel India will be 65.87 percent.
Analysts feel that being a loss making company Henkel was easy to buy, however, they cautioned Jyothy against the interest burden.
Higher level management from both companies was happy about the deal, and went on to state that for Henkel the deal would help it fortifyits market positionin urban India, whereas Henkel would benefit from Jyothy"s marketing and sales competence.