The deadline for Henkel AG to exercise its option to acquire a 26% stake in Jyothy Laboratories may be extended to November, as the German consumer goods firm is keen to take at least a 50% ownership in its Indian partner gradually, an executive close to the matter said.
Having a 50% stake will allow Henkel to consolidate the manufacturer of Ujala fabric whitener in its books. With the possibility of the deadline getting extended, the companies have also delayed negotiations on the premium to be paid for the stake, the executive said.
While a deal will provide Henkel an entry point in India's market, it will give Jyothy Labs access to the German company's expertise and brands.
As per a statement made by the company, Jyothy Labs promoters agreed to extend the March 2017 deadline, set under a 2011 deal, for Henkel, but the German firm would possibly want more say in the management, executives in the know said. But Jyothy Labs promoters are reluctant to give up the management control. Both sides held talks recently in Dubai.
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