Godrej family to split Rs. 1.76 lakh crore conglomerate
The Godrej family, known for controlling a massive Rs. 1.76 lakh crore business empire, is reportedly moving towards a friendly separation. As per The Economic Times, the 126-year-old conglomerate will be divided into two factions. The first will be Godrej Industries & Associates, led by brothers Adi and Nadir Godrej. The second will be Godrej & Boyce Manufacturing Company (G&B), spearheaded by their cousins Jamshyd Godrej and Smitha Godrej Crishna.
Key points of discussion in the split
Key points in the ongoing negotiations include the use of the Godrej brand name, potential payments of royalties, and valuations of land currently owned by G&B. The two factions are expected to finalize a formal split plan soon, detailing how various business sectors such as engineering, appliances, real estate, consumer products, security solutions, and agro-commodities will be divided.
Cross-holdings and family trusts complicate matters
Untangling the numerous cross-holdings among family members and family trusts adds to the complexity of the process. Another cousin of Adi Godrej, Rishad, who does not have children but is a shareholder, is also involved in the discussions. The decision to split was motivated by the aspirations of the next generation and their differing perspectives, as well as recent growth and inequality within some of the group's businesses.
Advisors and market capitalization
Jamshyd Godrej is receiving advice from banker Nimesh Kampani and corporate lawyer Zia Mody on the split. Meanwhile, Adi Godrej's side is being supported by legal firm Cyril Amarchand Mangaldas and banker Uday Kotak. Adi's son Pirojsha Godrej, who leads Godrej Properties, is also involved in the discussions. The Godrej group currently has five listed entities with a combined market capitalization of Rs. 1.76 lakh crore and a combined profit of Rs. 4,065 crore in FY23.
