Billionaires: Gautam Adani’s flagship company considers exiting $6bn consumer venture

In our fortnightly round-up of the world’s super wealthy, L’Occitane boss Reinold Geiger is in advanced talks on $6.5bn buyout of the skin care company and Elon Musk’s Neuralink raises $280m to develop brain implants

Indian billionaire Gautam Adani and his family may retain a minority stake in Wilmar International in a personal capacity following the sale. Reuters
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Gautam Adani

Adani Enterprises is exploring selling its stake in its Mumbai-listed consumer-staple joint venture with Wilmar International, freeing up capital for their core business, according to sources.

The conglomerate has been considering a potential sale of its 44 per cent stake in Adani Wilmar for a few months, the sources said.

Adani’s shares are worth about $2.6 billion at the current share price, according to Bloomberg calculations.

Indian billionaire Gautam Adani and his family may retain a minority stake in a personal capacity following a sale, the sources said.

Wilmar, the Singapore-headquartered food conglomerate cofounded by billionaire Kuok Khoon Hong in 1991, could decide to retain its stake in the business, one of the people said.

Deliberations are at an early stage and Adani Enterprises may decide to keep its stake, the people said.

Shares of Adani Wilmar have fallen about 38 per cent this year, valuing the company at around $6 billion.

Adani-linked companies had lost more than $150 billion in market value at one point after US-based short seller Hindenburg Research levelled fraud allegations against the business empire. The Adani Group denied any wrongdoing.

Adani is back to making deals now that the shares have stabilised. Ambuja Cements said on August 3 it will acquire Sanghi Industries at an enterprise value of $605 million.

Last month, Bain Capital agreed to buy the 90 per cent stake the family held in Adani Capital and Adani Housing.

Adani Wilmar raised about 36 billion rupees ($435 million) in an initial public offering in Mumbai in 2022.

Adani and Wilmar’s stakes together account for nearly 88 per cent of the company’s shares. The Securities and Exchange Board of India requires that large companies must have a minimum public shareholding of at least 25 per cent within five years of the date of the listing.

Adani Wilmar is a fast moving consumer goods company, offering many essential kitchen commodities for Indian consumers including edible oils, wheat flour, rice, pulses and sugar, according to its website.

Incorporated in 1999, the company’s products reach more than 114 million households through more than 10,000 distributors, according to its annual report. It competes in India with the likes of ITC and Hindustan Unilever.

The company reported a net loss of 790 million rupees ($9.5 million) in the quarter ending June 30. Management attributed the loss to falling edible oil prices and high-cost inventory.

Reinold Geiger

L’Occitane International’s controlling shareholder is in advanced talks on a potential deal to take the skincare company private at a valuation of around $6.5 billion, sources said.

Billionaire chairman Reinold Geiger has been discussing a possible offer of as much as HK$35 ($4.50) for each L’Occitane share he doesn’t already own, according to the sources.

Deliberations are continuing, and the eventual proposal could end up being slightly lower, they added.

Mr Geiger has lined up financing for the proposed bid and could announce a deal as soon as the coming days if he decides to move ahead, the sources said.

A vehicle ultimately controlled by Mr Geiger owns more than 70 per cent of L’Occitane, exchange filings show.

Mr Geiger has been speaking to advisers about the possibility of relisting L’Occitane on a European exchange as soon as next year depending on market conditions, one of the sources said.

Mr Geiger could still decide against proceeding with an offer, they said.

Bloomberg News reported last month that Mr Geiger is studying the possibility of taking the company private. The company confirmed its controlling shareholder reviews options from time to time, saying it hasn’t yet received any proposal to privatise or restructure the group.

L’Occitane, which is based in Luxembourg and Geneva, and its backers raised $787 million in the company’s 2010 IPO. It listed in Hong Kong at a time when a number of Western consumer companies were seeking to boost exposure to the fast-growing consumer market in China.

Elon Musk

Neuralink, Elon Musk’s brain implant company, has raised $280 million in new funding from investors to develop its technology.

The start-up announced the funding round in a post on Mr Musk’s X social network, formerly known as Twitter.

The deal was led by Founders Fund, a venture capital firm backed by billionaire Peter Thiel.

Neuralink is the best-known player in a growing field of brain technology companies. Partly spurred by Neuralink’s high profile, investors have backed dozens of other start-ups exploring similar technology.

Start-ups in the neurotechnology field raised $143 million this year through June 26, according to Pitchbook data. That compares with $278.1 million in all of 2022 and $518.9 million in 2021.

One rival, Synchron, enrolled its first patient in a US clinical trial last year, beating Neuralink to that milestone.

Neuralink recently received approval from the US Food and Drug Administration to conduct human clinical trials.

The company is developing a small device that uses electrode-laced wires to link the brain to a computer. Placing the device requires drilling into the skull.

Thomas and Andreas Struengmann

Thomas and Andreas Struengmann built one of the world’s biggest fortunes over the past four decades in medicine and health care, partly due to an early bet on a maker of Covid-19 vaccines.

A private equity giant has also increasingly helped shape their billions.

The Struengmann brothers’ agreement last week to lead the purchase of a hand sanitiser maker owned by EQT alongside other investors marks at least the sixth major deal involving the billionaire twins and the Swedish private equity firm within the past decade, according to data compiled by Bloomberg.

The deal for EQT’s Schuelke & Mayr values the Germany-based company at about €1.4 billion ($1.5 billion), sources said.

The sale is expected to close in the final quarter of 2023, according to a news release.

The 73-year-old brothers are together worth about $24 billion, according to the Bloomberg Billionaires Index.

The move underscores how private equity firms are aligning themselves more frequently with super-rich families on buyout deals and other opportunities as the companies look beyond their traditional client base for sources of capital amid a difficult fund-raising environment.

Apollo Global Management is targeting more co-investments with family offices. Blackstone and KKR are also building units to focus on wealthy individuals and their investment companies.

Before the Schuelke deal, the Struengmanns most recently dealt with EQT in December to buy a stake from the private equity company in SHL Medical, a Swiss provider of drug-delivery solutions.

In addition, they invested with EQT for the 2019 purchase of Nestle’s skin health unit, valuing it at 10.2 billion Swiss francs ($11.7 billion), along with a similar deal two years earlier for US biotechnology company Certara.

The brothers also teamed up with EQT during 2014 to buy Siemens’s hearing aid division. They partnered again last year to boost their hearing-aids bet.

The Struengmann brothers became two of the world’s biggest private investors by reallocating proceeds from their family’s generic drug companies, often focusing on the health sector that first made their fortune.

They’ve also diversified their wealth into real estate, energy and finance, selling German lender Suedwestbank in 2017 for more than double what they paid for it almost two decades ago.

This year, the siblings allocated funds in May to NexWafe, a German solar wafer producer that also counts divisions of Mukesh Ambani’s Reliance Industries and Saudi Aramco as investors.

They manage their fortune through their family office, Athos, which oversees the brothers’ roughly $10 billion combined stake in BioNTech, the German company that developed a Covid-19 vaccine with Pfizer.

The brothers helped to give the drug maker €150 million in 2008, three years after Novartis announced it was buying the brothers’ drug maker, Hexal.

Thomas Struengmann said in a rare interview with German newspaper Handelsblatt in 2019 that the brothers initially promised themselves they wouldn’t invest more than €1 billion in the biotech sector after selling Hexal. They ended up exceeding that cap after seeing glimpses of promise.

“You want to see your little plants continue to grow,” he said.

Updated: August 14, 2023, 11:01 AM