Dabur sells 40 pc Excelsia stake to Nestle

NEW DELHI, MAY 5: Dabur India Ltd has settled its dispute with the Swiss foods major Nestle SA by selling its entire 40 per cent stake in Excelsia Foods to the latter for an undisclosed amount.

As per the release, Dabur will now withdraw its petition from the CLB which it had filed against Nestle SA, on March 27, 2000 alleging oppression and mismanagement of the joint venture company, Excelsia Foods, under section 397/398 of Companies Act, 1956.

Under the settlement, Dabur has been released from the `non-compete obligation' and is free to enter the biscuit business, the release adds.

Significantly Dabur had earlier refused to consider Nestle's offer to transfer its holding of 54 lakh shares at a face value of Rs 10. It had said it will consider Nestle's offer only if the Swiss company honours "non-compete clause", continues to discharge all its obligations under the technical assistance agreement and makes good losses worth Rs 25 crore.

Excelcia was set up as 60:40 joint venture by Dabur with Osem Foods of Israel, which was taken over by Nestle SA worldwide. In February 1999, Nestle SA took over Excelcia by purchasing 20 per cent holding from Dabur India for around Rs 11 crore. With this Nestle became the majority stake holder in the project.

Matters came to a head in March when Nestle's three nominees--Nestle India managing director Carlo Donati and finance chief Jean Wealti and Excelcia's managing director Richard Lister--resigned from the board of Excelcia.

Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.