Competition Commission Approves Split in Godrej Empire

Moneylife Digital Team 19 June 2024

Investor Interest

The competition commission of India (CCI) has approved the proposed combination involving the realignment of interests, legal ownership, and management of various entities within the 127-year-old Godrej group.

The proposed combination relates to the realignment of interests, legal ownership, and management of various entities within the Godrej group pursuant to an inter-se arrangement between the members of the family branches such as Adi Godrej and family (ABG family), Nadir Godrej and family (NBG family), Jamshyd Godrej and family (JNG family) and Smita Crishna and family (SVC family). Such realignment will take place in accordance with the family settlement agreement (FSA) dated 30 April 2024 executed by the family branches.

The target enterprises forming part of the proposed combination include group entities from the GILAC and G&B.

GILAC group entities include: Godrej Industries Ltd, Godrej Consumer Products Ltd, Godrej Properties Ltd, Godrej Agrovet Ltd, Godrej Seeds & Genetics Ltd, Innovia Multiventures Pvt Ltd, Astec Lifesciences Ltd and Anamudi Real Estates LLP.

G&B group entities include: Godrej & Boyce Manufacturing Company Ltd, Godrej Holdings Pvt Ltd, Godrej Infotech Ltd and RKN Enterprises.

Last month, in a regulatory filing, Godrej Industries said, "The third and fourth generations of the family branches have diverse interests and varying perceptions as to, amongst others, the strategic direction, growth and governance of the Godrej group entities. The family branches are desirous of ensuring harmony in the future amongst the succeeding generations of the Godrej family. To preserve mutual respect, goodwill, amity and harmony and to manage diverse expectations and strategic directions desired by each family branch, each branch head, acting for himself and on behalf of the other members of his concerned family branch, has agreed upon a family settlement arrangement by way of the FSA amongst the family branches."

"The family groups have also entered into a brand and non-compete agreement to record their understanding in respect of the delineation of the rights for adoption, use, ownership and registration of the Godrej brand as well as accepting certain non-compete obligations on the terms and conditions thereunder. This shall ensure stability and continuity of the businesses carried out by each family branch and maintain harmony amongst the family groups," it added.

The FSA also clarifies that there is no shareholders' agreement between the two groups and no special rights like appointing directors and any first right to share subscription are assigned to anyone.

After the FSA became effective, both groups agreed not to be directly or indirectly involved in the management and operations of entities under the control or management of the other group.

Adi Godrej's family has 10 members, including himself, Tanya Dubash, Nisaba Godrej, Pirojsha Godrej, Aryaan Dubash, Azaar Dubash and four minors, Zoran Mehta, Aidan Mehta, Sasha Godrej and Lana Godrej. Nadir Godrej's family has five members: himself, Rati Godrej, Burjis Godrej, Sohrab Godrej and Hormazd Godrej.

Jamshyd Godrej has four members in his family, including himself. They are: Pheroza Godrej, Navroz Godrej and minor Raika Godrej.

Smita Godrej Crishna has seven other members in her family. The other members are: Freyan Crishna Bieri and Nyrika Holkar, as well as four minors, Kiyan Bieri, Zai Bieri, Arianne Holkar, and Aryaman Holkar.

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