HUL to sell water purification business Pureit for ₹601 crore

Hindustan Unilever Limited (HUL) on Monday announced that it has signed an agreement for the sale of its Pureit business in India to A. O. Smith, a U.S.-based global water technology company, for ₹601 crore ($72 million).

Pureit offers a broad range of residential water purification solutions and has a turnover of ₹293 crore, less than 1% of HUL's turnover.

A. O. Smith expects to complete the acquisition of Pureit by the end of 2024.

HUL will continue to manage the business until the completion of the transaction.

“This move is in line with our strategic intent to focus sharply on our core categories. Pureit provides essential water purification solutions to millions of loyal consumers, and I am confident the brand will thrive further under the ownership of A. O. Smith,” says Rohit Jawa, CEO and managing director of HUL.

Pureit was first launched in Chennai in 2004 with the introduction of Pureit Classic. It was launched nationwide in 2008. The company entered the electric water purification segment in 2011 and further strengthened its portfolio.

“The Pureit brand, known for innovative water purification products, strong brand recognition and dedication to customer service, complements A. O. Smith’s geographic and channel presence. The Pureit team’s deep understanding of consumer needs and water treatment expertise adds tremendous strength to A. O. Smith in India, and we look forward to welcoming the Pureit team to the A. O. Smith family,” says Parag Kulkarni, president of A. O. Smith India Water Products Private Limited.

A. O. Smith does not expect the acquisition to have a material impact on earnings in the first year.

"We believe the addition of Pureit will strengthen our leadership position as a global supplier of premium water treatment products and double our market penetration in South Asia. The acquisition will also support our corporate strategy by enhancing our premium product portfolio and distribution capabilities," says Kevin J. Wheeler, the company's chairman and chief executive officer.

"Pureit's culture of innovation, strong brand recognition and dedication to customer service will be an excellent addition to our premium brand positioning and broad product portfolio in the region. We look forward to welcoming the Pureit team to the A. O. Smith family," says Wheeler.

FMCG giant HUL’s board is scheduled to meet on July 23 to consider the financial results for the quarter ended June 2024.

HUL reported a 6% decline in its consolidated net profit at ₹2,406 crore in Q4 of FY24 as against ₹2,552 crore in the corresponding period of the previous year. The maker of Dove shampoo and Pepsodent toothpaste reported flat revenue at ₹15,210 crore in Q4, as against ₹15,215 crore in the same period last year. HUL expects FMCG demand to improve gradually. The FMCG major is optimistic about the mid-term impact of better monsoons, and improving macro-economic indicators. The company, however, expects price growth to be low-single-digit negative “if commodity prices remain where they are.”