The multi-billion dollar Godrej Group, which has interests from fast-moving consumer goods to real estate, consumer durables and even aerospace, has finally reached an amicable settlement to split the business into two groups, one led by Adi Godrej, his brother Nadir and family on one side and cousin Jamshyd Godrej and his sister Smita Crishna on the other.
"The third and fourth generations of the family branches have diverse interests, and varying perceptions as to, amongst others, the strategic direction, growth and governance of the Godrej Group entities. The family branches are desirous of ensuring harmony in the future amongst the succeeding generations of the Godrej family. To preserve mutual respect, goodwill, amity and harmony and to manage diverse expectations and strategic directions desired by each family branch, each branch head acting for himself and on behalf of the other members of his concerned family branch, has agreed upon a family settlement arrangement," according to a statement issued late on Tuesday night.
Godrej Industries Group, which includes the listed companies, Godrej Industries, Godrej Consumer Products, Godrej Properties, Godrej Agrovet and Astec Lifesciences will have Nadir Godrej as chairperson and will be controlled by Adi Godrej, Nadir Godrej, and their immediate families. Pirojsha Godrej (Adi's son) will be the executive vice chairperson of Godrej Industries Group and will succeed Nadir as the chairperson in August 2026.
Godrej Enterprises Group, comprising of Godrej & Boyce and its affiliates, which has interests in locks, consumer durables, aerospace, building materials, furniture, interior design, software, healthcare equipment among other things, will now be controlled by Jamshyd Godrej, chairperson and managing director, Nyrika Holkar (Smita's daughter), executive director, and their immediate families.
"The family groups have also entered into a brand and non-compete agreement to record their understanding in respect of delineation of the rights for adoption, use, ownership and registration of the Godrej brand as well as accepting certain non-compete obligations on the terms and conditions thereunder. This shall ensure stability and continuity of the businesses carried out by each family branch and maintain harmony amongst the family groups," the statement read.
The Godrej Group was established 127 years ago. While the businesses were already being run separately, the two sides had held shares in each others companies and were also on the board of the various companies. All that will now change with the shareholding between the two families to be untangled and the equity interests respectively transferred.
"The realignment has been arrived at in a respectful and mindful way to maintain harmony and to better align ownership in acknowledgement of the differing visions of the Godrej family members. This will help maximize strategic direction, focus, agility, and will accelerate the process of creating long-term value for shareholders and all other stakeholders," as per the statement.
Both the groups will continue to use the Godrej brand and are committed to growing and strengthening their shared heritage, it further added.
"With this future-facing family agreement now in place, we can further drive our growth aspirations with fewer complexities and focus on leveraging our core strengths in high tech engineering and design-led innovation across our strong portfolio of strategic, consumer and emerging businesses," said Jamshyd Godrej.
After the effective date of the family settlement agreement, which will be an agreed date once all the conditions are met, including the approval from the Competition Commission of India, the shareholding, interests and directorships held in various entities by the two groups will be realigned.
The members of the Adi and Nadir Godrej family will not be directly or indirectly involved in the management and operations of entities under the control or management of the Jamshyd Godrej and Smita Crishna family; and the members of the Jamshyd Godrej and Smita Crishna family shall not be directly or indirectly involved in the management and operations of entities under the control or management of Adi and Nadir Godrej.
Shares of Godrej Industries, Godrej Consumer, Godrej Properties and Godrej Agrovet held by members of the Jamshyd Godrej and Smita Crishna family on or after the effective date are not permitted to be transferred to competitors identified under the settlement agreement, except either with the prior consent of branch heads of Adi and Nadir Godrej family or through a non-negotiated on-market sale.
Similarly, shares of Godrej & Boyce Manufacturing Company, held by members of the Nadir Godrej family on or after the effective date are not permitted to be transferred to competitors identified under the agreement, except either with the prior consent of the branch heads of Jamshyd Godrej family or Smita Crishna family or through a non-negotiated on-market sale in the event the shares of Godrej & Boyce are traded on any stock exchanges.
“Godrej was founded in 1897 to help build economic independence for India. This deep purpose of innovating for a cause - the values of trust and respect and the belief in trusteeship and making communities that the companies operate in stronger and better - continue to form the bedrock of who we are 125 years later. We look forward to building on this legacy with focus and agility," said Nadir Godrej.
The Adi and Nadir Godrej family shall have the exclusive right to adopt, use, own and register the Godrej name and brand in businesses such as FMCG, foods & beverages, dairy products & services, financial services, pharmaceuticals, pharmacy, diagnostics, sexual wellness, agriculture and agriculture related services, fertilisers, chemicals, oils & fats, etc. The family will also have the exclusive rights in connection with development and marketing of real estate projects.
The family of Jamshyd Godrej and Smita Crishna shall have the exclusive right to adopt, use, own and register the Godrej name and brand in businesses such as space, aerospace, defense, furniture, durables, heavy engineering, locks and architectural hardware, EPC services, construction materials, home and office automation services, home and commercial interior design services, medical devices, software solutions, IT/ITeS, machines, energy, electric mobility business, vending machines, security products and solutions, intra-logistics, transmission systems, etc.
Both family groups can undertake businesses, which are not being undertaken by either of them as on January 1, 2024, and which have been agreed as being shared spaces for doing business; medical services, hospitals, hospitality, education, etc being some of the examples.
