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BACKSTORY: Rajan Pillai and the battle for Britannia

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Britannia’s Marie and Tiger brand biscuits have been the tea-time accompaniments for generations of Indians. Their bland appearance though gives few clues to the struggle for control of the company over three decades ago involving corporate contestants including French giant Danone as well as RJR Nabisco, whose infamous leveraged buyout is famously chronicled in the book Barbarians at the Gate.

BACKSTORY: Rajan Pillai and the battle for Britannia
Britannia’s Marie and Tiger brand biscuits have been the tea-time accompaniments for generations of Indians. Their bland appearance though gives few clues to the struggle for control of the company over three decades ago involving corporate contestants including French giant Danone as well as RJR Nabisco, whose infamous leveraged buyout is famously chronicled in the book Barbarians at the Gate.
The battle for Britannia played out on the sidelines of that global drama.
For nearly a century, the company quietly made its well-regarded breads and biscuits. A public issue in 1978 forced upon it by the requirements of the Foreign Exchange Regulation Act, led to its Indian shareholding going up to 62 percent while the foreign stake held by the UK-based Associated Biscuits International (ABIL) dipped to 38 percent.
It was the signal for a fierce battle for control with the first move coming two years later from the Janardhana Mohandas Rajan Pillai who had set up 20th Century Foods in Singapore and was selling potato chips under the popular brand name, Ole.
Soon he sealed a joint venture with bigger rival Standard Brands, which was then headed by F. Ross Johnson, who would later become the CEO of Nabisco after it took over Standard Brands and in that capacity led the audacious but ultimately unsuccessful attempt to buy out the American cigarette major.
In 1985, Pillai sold off his 50 percent share in the Singapore JV and moved to a senior role at International Nabisco Brands in London. In 1987, he picked up an 11 percent investment stake in Britannia and a year later, in December 1988, he acquired a further 38 percent stake in the biscuit company.
According to an India Today story of December 1988, the 38 percent acquisition came about thanks to events at Nabisco which was slap bang in the middle of its own change of guard.
With Kohlberg, Kravis, Roberts & Company (KKR) beating Ross Johnson to acquire Nabisco after forking out a whopping $25 billion, the leveraged buyout specialist desperately needed funds to repay banks and institutions. Selling stakes in profitable subsidiaries worldwide was one of the options and Pillai, shrewdly gauged his chance, making a dash to New York to negotiate the purchase of the tobacco giant’s stake in Britannia.
All would have ended well for Pillai had it not been for the entry into the fray of Nusli Wadia, who had been talking to representatives of ABIL for a tie-up in India. But even before he could take the conversation forward, news came that Pillai had teamed up with Johnson to buy ABIL from Nabisco and with his French ally Groupe Danone (then known as Groupe Boussois-Souchon-Neuvesel) had also gained control of Nabisco's operations in Singapore, Malaysia, Hong Kong and New Zealand.
This put paid to Wadia’s aspirations for the moment. Wadia though, never a man to take things lying down, staged a coup and in association with Danone turned the tables on Pillai buying out his stake in Britannia.
It was a messy battle and fought literally to the finish for in 1995 Pillai aged just 48, succumbed to liver cirrhosis in Delhi's Tihar Jail while awaiting extradition to Singapore on charges of fraud and cheating.
The battle for Britannia wasn’t over yet as Wadia and Danone too had a bitter falling out. Finally, in 2009, the French company exited the biscuit maker leaving Wadia as its triumphant owner with a 40 percent share.
 
—Sundeep Khanna is a former editor and the co-author of the recently released Azim Premji: The Man Beyond the Billions. Views are personal

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