Baba Ramdev-led Patanjali Ayurved has decided to sell its home and personal care business to listed group firm Patanjali Foods Ltd for Rs 1,100 crore.

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The acquisition will help edible oil firm Patanjali Foods to become an FMCG company.

In a regulator filing, Patanjali Foods informed that the board has approved the "acquisition of the entire non-food business undertaking i.E. Hair care, skin care, dental care and home care carried out by Patanjali Ayurved, including but not limited to all movable assets, immovable properties, contracts, licenses, books and records, employees and certain assumed liabilities of PAL through a slump sale arrangement on a going concern basis".

This is subject to the approval of shareholders, lenders and other necessary approvals.

The deal will accelerate the company's transition into a leading FMCG company, Patanjali Foods said.

The home and personal care business of Patanjali Ayurved currently has strong brand equity in India's FMCG space and enjoys a loyal consumer base, the filing said.

Presently, it caters to four key segments - dental care, skin care, home care, and hair care.

Patanjali Foods and Patanjali Ayurved have also agreed to enter into a licensing agreement, permitting the company to use the trademarks and associated intellectual property rights, owned by the latter.

"The transfer of the home and personal care business has been mutually negotiated between the company and Patanjali Ayurved (basis valuation exercises conducted by independent valuers) for a lump sum consideration of Rs 1,100 crore only".

The acquisition will lead to a consolidation of the 'Patanjali' brand FMCG products portfolio.

"The acquisition will bring along with it multiple key synergies in terms of brand equity and enhancements, product innovations, cost optimisation, infrastructure & operational efficiencies and positive impact on market share," Patanjali Foods said.

Pursuant to the approval of the board, Patanjali Foods will now take the necessary steps to execute the definite agreements in connection with the acquisition as well as apply for necessary approvals integral to the transaction.