Hindustan Unilever sells its water purification business, Pureit, to AO Smith for Rs 601 crore

FMCG giant Hindustan Unilever Limited (HUL) has sold its water purification business Pureit in India to water technology company AO Smith for Rs 601 crore ($72 million). 

The sale aligns with HUL's strategic intent to focus on its core categories. The deal, expected to close by the end of 2024, includes the transfer of Pureit's trademarks, copyrights, other intellectual properties, and associated assets and contracts.

“The proposed transaction will happen by way of a slump sale through a business transfer agreement between the HUL and AO Smith India Water Products,” HUL said in its stock exchange filing.

Why did HUL decide to sell Pureit?

Rohit Jawa, CEO and Managing Director of HUL, said, “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.”

The decision is part of a broader strategy by HUL to streamline its portfolio, having previously sold non-core brands such as Annapurna and Captain Cook.

What is the financial impact of the sale?

In the financial year 2023-24, Pureit's turnover was Rs 293 crore, less than 1% of HUL’s total turnover.

The transaction is subject to customary closing conditions, and HUL will continue to manage the business until it is completed.

According to AO Smith, the acquisition will not have a material impact on their earnings in the first year.

Leadership comments

Kevin J Wheeler, Chairman and CEO of A. O. Smith Corporation, said, “We believe the addition of Pureit will strengthen our leadership position as a global supplier of premium water treatment products and will double our market penetration in South Asia. The acquisition will also support our corporate strategy by enhancing our premium product portfolio and distribution capabilities.”

Parag Kulkarni, President of A. O. Smith India Water Products, added, “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.”

Pureit launch in India

Pureit was first launched in Chennai in 2004 with the introduction of the Pureit Classic, a gravity-based water purifier aimed at providing accessible and safe drinking water. It expanded nationwide in 2008 and entered the electric water purification segment in 2011.

The company launched Copper RO in 2019 and new technologies such as FiltraPower and DURAViva in 2022 and 2023.

As part of AO Smith, Pureit is expected to leverage the company's global reach and technological expertise to further enhance its market presence and product offerings.