When at a press conference late last year IBL chairman and managing director Salil Punoose said the company was "open" to acquisition, little did he apprehend that in a bigger gameplan in the international arena, a competitor would decide to gobble up its own parent Bestfoods in a $20.3 billion deal. IBL is a 73.19 per cent subsidiary of Bestfoods.

"Acquisitions tend to fall on your lap" was what Punoose (an ex-Lever man) had to say in response to journalists' queries in December 1999. IBL was then hogging the limelight for having successfully concluded the takeover of DCW's Captain Cook brand. The brand was expected to bloat its future bottomline. With the acquisition of Captain Cook, IBL, a small fish in the pond (with a turnover of about Rs 100 crore), evidently took on the challange to compete with bigwig HLL.

HLL's Atta brand Kishan Annapurna was then being splashed across the media, be it on hoardings, print, or television. Captain Cook would now fall in HLL's lap. Not only Captain Cook, but also other IBL brands, like Brown & Polson, Knorr, Rex, Skippy & Glucovita. With Knorr, HLL would pose a major threat to Nestle, whose Maggi brand is well established in the market. HLL already competes with Nestle on the Ketchup front.

IBL had also taken over the Tarla Dalal range of ready mixes, which would now fall in HLL's fold.

Officially, however, both IBL and HLL are not making any comment at the moment. It is thus not clear as to whether IBL will be present as a Unilever subsidiary, to be subsequently merged with HLL, or directly come under HLL's fold. Industry observers do rule out either of the possibilities.

In the past, Pond's and Brooke Bond India have been spawned as Unilever subsidiaries in India following the international turn of events. These were subsequently merged with HLL. The IBL takeover is expected to take at least six months to complete.

Analysts who cover the FMCG industry feel the immediate impact of the international turn of events on HLL would be negligible. HLL is an ocean of brands (110 in the Indian market), and the inclusion the IBL brands is not going to make much of a difference, they feel.

The IBL brands would nevertheless get the required financial dose and distribution boost from HLL.

Says Birla Sun Life head of research K Ramachandran: "The Indian impact is not significant, and even the Bestfoods brands in India deal in small markets. However, HLL's financial clout and distribution strength will boost IBL's brands fortunes and grow the market. HLL's media buying strength will also give the brands the required reach to a wider audience".

While IBL's brands would diversify HLL's food portfolio, the real impact on the multinational's vision to expand its food business will have to wait for a few years more, say analysts. Describing the Indian impact of the deal as "non-meaningful", an analyst from a leading research firm pointed out that financially IBL would form just about 1 per cent of HLL's turnover of Rs 10,142.49 crores. "Levers is strong in all aspects of finance, distribution people and brand, and IBL will not make much of a difference", concurs Ramachandran.

Analysts, however, are of the opinion that HLL will be a significant player in the soups market. They say that HLL wold rather hone the growth of Knorr-soup in the Indian market than launch an extensive drive to introduce its international brands of Bachelor's soup from Lipton.

As to whether Captain Cook would consolidate HLL's Atta brand portfolio, Ramachandran said that Captain Cook may die a natural death as Kisan Annapurna already has a strong presence. A multiple brand strategy and varied price points in the Atta market is not of the order, feel analysts.One major gain is Bestfood's major food brands will swiftly come into the Indian market. IBL, operating in India for 69 years, followed a clear philosophy: to operate in niche categories, and to avoid "crowded" markets like mineral water, and aerated soft drinks. The company's distribution reach at 2.5 lakh outlets will also add to HLL's distribution strength of 7500 re-distribution stockists.