India's Godrej Group Splits into Two Entities After 127 Years

The Godrej Group, one of India's oldest and most prominent business conglomerates, has announced a major split after 127 years of operation. The family-owned enterprise will be divided into two separate entities, with each branch of the family taking control of different parts of the business.

Under the terms of the settlement agreement, brothers Adi and Nadir Godrej will gain control over Godrej Industries and its five listed firms, including Godrej Consumer Products, Godrej Properties, Godrej Agrovet, and Astec LifeSciences. Meanwhile, their cousin Jamshyd Godrej and his sister Smita Godrej Crishna will retain control over the unlisted Godrej Boyce, its affiliates, and a substantial 3,400-acre land bank in Mumbai.

The decision to split the conglomerate comes after nearly two years of discussions among the family members to reach an amicable settlement of the group's assets. The agreement aims to ensure that the stakes held by the two factions in each other's companies are divested, allowing for a clear separation of ownership and management.

Why this matters: The Godrej Group's split marks a significant shift in the Indian business landscape, as one of the country's oldest and most respected conglomerates undergoes a major restructuring. The move is anticipated to have far-reaching implications for the various industries in which the Godrej Group operates, as well as for the future of family-owned businesses in India.

The family settlement was completed with grace and dignity, without any controversies. "The family settlement agreement aims to preserve mutual respect, goodwill, and harmony among the family branches with diverse strategic directions," a spokesperson for the Godrej family stated.

The split is anticipated to allow the two groups to focus on their respective businesses and manage their assets more effectively. However, the shareholding and directorships between the entities will need to be realigned before the effective date of the agreement and approval by the Competition Commission of India.

The Godrej Group, founded in 1897, has a long and storied history in India, with a presence in various sectors such as consumer goods, real estate, agriculture, and chemicals. The conglomerate's split signifies a new chapter in its legacy, potentially setting the stage for enhanced focus and strategic direction within each of the newly formed entities.

Key Takeaways

• Godrej Group, 127-year-old conglomerate, to split into two entities.
• Adi and Nadir Godrej to control Godrej Industries and listed firms.
• Jamshyd Godrej and Smita Godrej Crishna to retain Godrej Boyce and land.
• Split aims to ensure clear separation of ownership and management.
• Settlement completed amicably, to allow focused business strategies.