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The founding family of the 127-year-old US$5 billion ($6.8 billion) Godrej Group has agreed to split the conglomerate.
Mr Adi Godrej and his brother Nadir will retain ownership of Godrej Industries, which includes five listed firms. Their cousins Jamshyd Godrej and Smita Crishna will take over the unlisted Godrej & Boyce and its affiliates, reported Reuters.
This split represents a division between two branches of the founding family. Mr Adi, 82, and Mr Nadir, 73, will lead one side, while Mr Jamshyd, 75, and Ms Smita Crishna, 74, will oversee the other, as outlined in a statement released by the group.
The rationale behind this split, according to the family’s statement, is described as an “ownership realignment” of their shareholdings in the Godrej companies.
“The realignment has been arrived at in a respectful and mindful way to maintain harmony and to better align ownership in acknowledgement of the differing visions of the Godrej family members. This will help maximise strategic direction, focus and agility and will accelerate the process of creating long-term value for shareholders and all other stakeholders,” the statement read.
The division was agreed upon to honour the differing viewpoints within the family over business strategies, especially among the younger generation.
There have been no apparent undercurrents despite the differences, reported NDTV.
The two factions of the Godrej family have historically owned shares in various companies within the group and served on each other’s boards. However, to facilitate a clean separation, they have decided to transfer their equity interests after resigning from their respective board positions.
Some family members may still own a small number of shares in the other family’s companies, but they will not have special privileges as owners.
The iconic business group began as a lock company and later produced the world’s first vegetable oil soap under the brand name Chaabi (meaning “the key” in Hindi).
According to the company, the separation will help maximise strategic direction, focus, agility and accelerate the process of creating long-term value for shareholders and all other stakeholders.
“Godrej was founded in 1897 to help build economic independence for India,” Mr Nadir said. “This deep purpose of innovating for a cause – the values of trust and respect and the belief in trusteeship and making communities that the companies operate in stronger and better – continue to form the bedrock of who we are 127 years later.
“We look forward to building on this legacy with focus and agility.”
