Start Up Acquisitions And Corporate Restructuring – HUL And Minimalist
Author: LawSphereX
Category: Corporate & Insolvency
Published:
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START UP ACQUISITIONS AND CORPORATE
RESTRUCTURING – HUL AND MINIMALIST
Muskan Jain, BA LLB, UPES, Dehradun
ABSTRACT
This paper examines the growth of startups in India’s consumer market, due to the changing market dynamics, consumer preferences and their agility and innovation facilitates this. It further discusses as to why these corporate giants are using startup acquisitions as one of their strategy to expand their business, consumer base and tech savvy. The case study of Hindustan Unilever Limited’s acquisition of Minimalist a leading D2C skincare brand helps in understanding this trend in a much better way, by highlighting the necessary facts, the reason as to why the acquisition was made, who are the statutory regulators whose permission has to be taken like Competition Commission of India, SEBI.
The analysis also highlights the critical postacquisition phase of corporate restructuring, detailing the duties and challenges faced in integrating startups while preserving their unique culture and brand identity. Challenges such as cultural clashes, identity loss, employee resistance, and strategic misalignment are addressed. Ultimately, it concludes with how successful startup acquisitions and restructurings can drive sustainable growth, innovation, and market leadership in India’s dynamic consumer ecosystem.
"The success of the young entrepreneur will be the key to India's transformation in the new millennium" – Dhirubhai Ambani INTRODUCTON Startups, the most talked about topic in the recent years are becoming an integral part of India’s consumer market. The reason for this is the change in the market dynamics, consumer needs and the most important is their agility to change in this evolving market. The consumers are now more inclined towards brands that indulge transparency, innovation in their products and are also digitally connected, startups in this matter has an upper hand because it is much easier for them to adapt then the companies that are in market for a very long time.
Startups are disrupting the market owned by some dominant companies for a very long time by creating interfaces that grabs the attention of the consumers and for all these reasons the established companies are now looking forward to acquire these companies as a strategic move. Amidst these volatilities these established entities are adopting various strategies to remain competitive in the market and one such strategy is acquisition of the innovative startups. This would help them to expand their existing horizon which is more digitally driven and also their customer base. Since D2C as a concept is rising, digitally native brands allow them to understand the needs of the consumer in a much efficient way and respond accordingly, This acquisition is not only beneficial for established entities but also for the startups.
As they get hands on their already developed supply chain and resources enabling them to make their products more cost efficient. The capital they receive and also the insights from the experienced players helps them improve and grow eventually. They can expand their consumer base and market reach with the help of these entities and lastly the trust on these established entities to some extent influences the trust factor of the startups. We will now discuss all these in detail with the help of a case study on HUL and Minimalist. STRATEGIES ADOPTED AND INNOVATION IMPACT In the modern and evolving market, startup acquisitions have become one of the most adopted strategy by the established entities to accelerate their growth rate, remain competitive in the market as well cater to the need of the consumers.
The very reason for undertaking startup acquisitions is that startups can facilitate innovation and provide access to new technologies, new consumer segments, and new business models, much more quickly than an established entity could produce through their already existing business models. Startups provide a unique entrepreneurial culture, digital-first approach and deep consumer insights that can supplement the scale and resources of these entities. Acquisitions enables company to quickly build out its product portfolio, enter premium or niche markets, and leverage first-party data that is necessary to achieve personalization for consumers. The innovation impacts from the acquisition of a startup company seem to be enormous, integrating the new company's/ startups dynamism, along with the large corporation's existing assets and resources.
This allows the start-up company to speed up its development cycle, be cost efficient which indirectly results in making more profits while remaining productive at the same time. It also gives opportunity to these companies to get in touch with experienced players of the market, get proper leadership, guidance on how to grow their business, what are the common mistakes that could be avoided. Thus, this strategy can be beneficial for both if executed and maintained in a proper way. HUL AND MINIMALIST Facts On 22nd January 2025 in a financial conference HUL announced its acquisition of Uprising Science Private Limited, the parent company of Minimalist. 1 HUL has made an agreement to acquire 90. 5% stake in minimalist with an all cash transaction totalling for Rs 2,670 cr. Valuing the parent company at a pre-money enterprise valuation of INR 2,955 crore.
2 This deal is completed via both primary and secondary buyouts, with HUL agreeing to purchase the remaining 9. 5% stake from the founders for about 45 cr. within 2 years. With this agreement all the subsidiaries of minimalist become the subsidiary of HUL. Prior to the acquisition the company managed to get funds from various investors including Unilever Ventures, 29 capital investors and Peak XV Partners. The total investments raised till date is close about 5 million3. The profitability of the company from the first year of its operation helped in giving its early investors a profitable exit. For instance, as per reports Peak
1 HUL to acquire premium beauty brand Minimalist.(Unilever) ( Jan. 22, 2025)
https://www.hul.co.in/news/press-releases/2025/hul-to-acquire-premium-beauty-brand-minimalist/ ( Last visited Nov.15,2025) 2 Sharleen Dsouza, Hul to acquire 90.5% stake in Minimalist at enterprise value of Rs 2,995 CR, (Business Standard) (Jan. 22,2025) https://www.business-standard.com/companies/news/hul-to-acquire-90-5-stake-inminimalist-at-enterprise-value-of-rs-2-995-cr-125012201227_1.html (Last visited Nov. 15, 2025)
3 Anne Florentyna, CCI Approves HUL’S Acquisition of D2C Brand Minimalist, (Inc42) (Mar. 18,2025)
https://inc42. com/buzz/cci-approves-huls-acquisition-of-d2c-brand-minimalist/ ( last visited Nov. 15,2025) XV Partners exited making around 10X of its initial investment4 The agreement was completed in April 2025 with HUL’s plan to further purchase 9. 5% stakes. The founders are still given the duty to operate the business in collaboration with HUL in order to expand its business and make more profits without diverting from the aim and motive of the company. HUL aims to use this acquisition in order to expand its horizon in premium personal care segment and Minimalist agreed for the same because of the already existing supply chain, various distributive networks, connections, manufacturing strength and marketing capabilities of HUL. The acquisition is said to be one of the largest D2C deals with respect to all cash transaction.
STATUTORY REGULATIONS Let us now discuss the statutory regulations that needs to be followed in the process of acquisition and whether HUL also adhered to these regulations. Competition Commission of India CCI acts as a watchdog for any combinations happening in India or outside India whose impact will be affecting the citizens of India. The threshold when you have to take permission from CCI is given under section 5 of Competition Act,20025. CCI ensures that every combination is healthy for the market and has no adverse effect as per section 19(3) and 20(4) some of which are- that the combination should not result in monopoly, no barriers are created for the entry of new entrants in the market, market share in the relevant market and many more. CCI if thinks that after some modification the combination can be made effective, can suo moto give suggestions.
The acquisition made by HUL falls under this required threshold, therefore the role of CCI comes into picture. Cyril Amarchand Mangaldas, Trilegal and Khaitan & Co. and IndusLaw advised/counselled HUL, Uprising Science and investors respectively6. A notice for the same was filed by HUL on 28th January 2025 in accordance with section 6 (2) of Competition
4 Akshit Pushkarna, Peak XV Rakes In 10X gains, makes INR 800cr From Minimalist exist, (Inc42) (Jan.
22,2025) Peak XV Makes INR 800 Cr From Minimalist Exit ( last visited Nov. 15,2025)
5 Competition Act,2002, §5, Acts of Parliament,2002
6 CAM, Trilegal, Khaitan, IndusLaw act on HUL acquisition of minimalist for ₹ 2,995 crore (Bar and Bench) ( Jan. 24,2025) https://www. barandbench. com/dealstreet/cam-trilegal-khaitan-induslaw-act-on-hul-acquisition-ofminimalist ( last visited Nov. 15,2025) Act,20027 and giving assurance that this acquisition would not effect the overall market or any of its competitors. CCI after taking all the due diligence and ensuring that the combination has no adverse effect as per sec 20(4) and 19(3) of Competition Act,2002, approved the combination in the month of March. The decision was that all the existing investors including Unilever were asked to release their shares on the price negotiated, also it stated about the transaction method involved in this deal i. e both secondary – INR 27.
6 billion purchase of shares from the investors and primary involving cash infusion of INR 450 million into minimalist and further purchase of remaining shares8 SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 SEBI formulates regulations in order to promote transparency and safeguard the investor’s right. It mandates the companies to duly make disclosures about any activity carried out by them, that could impact the shareholders and the overall market. This is done to ensure no unfair trade practices like insider trading, spread of misinformation or price manipulation is being practiced. HUL being a public listed company, invites the scrutiny by SEBI. SEBI(LODR) Regulations,
2015 section 309 lists out the disclosure of events and information that every company must
follow, therefore HUL on 22nd January 2025 made the disclosure of all required information including name and turnover of the target company, nature of the acquisition and considerations, board meeting, regulatory approvals, press release etc.10 SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVER) REGULATIONS, SEBI (SAST) regulations come into picture when the acquirer acquires more than 25% shares of the target company. These regulations apply to only public listed company where min 25% stakes should be held by public. This regulation ensures fairness and transparency by requiring proper disclosures usually through open offer which is mandatory.
7 Competition Act,2002, §6(2), Acts of Parliament,2002
8 Combination Registration No. C-2025/01/1238
9 SEBI(LODR) Regulations,2015, §30, Acts of Parliament,2002
10 Approval for acquisition of shares of uprising science private limited (Unilever) ( Jan. 22,2025), https://www. hul. co. in/files/approval-for-acquisition-of-shares-of-uprising-science-private-limited. pdf ( last visited Nov. 15,2025) HUL acquisition of Minimalist does not mandate the company to follow SEBI (SAST) as this regulation apply to only public listed company and minimalist in this case was a private entity. DATA AND CONSUMER PROTECTION LAWS In the current market consumers are more attracted towards D2C brands because of convenience and personalization, also the large internet base helps to facilitate this. Since these brands are directly dealing with the consumers, compliance with data protection laws must be strictly ensured in order to gain public trust. Violation of these laws can attract penalties plus the reputation of the brand can also be degraded.
Minimalist being a D2C brand may have personal information like personal identifiers, payment and purchase history of its consumers, therefore they should take an extra effort in maintaining and complying with data protection laws. After acquisition an equal effort have to be made by HUL even though the management and operational control is still with the founders of minimalist. COMPANIES ACT, 2013 Companies Act lists down certain mandates in respect to the acquisitions, which includes Board Approval, shareholders’ approval (special resolution has to be passed), public announcement, valuation of shares and filing with registrar within a stipulated time frame. Post-acquisition also certain duties are to be performed like share transfer deed, record updates, etc. CORPORATE RESTRUCTURING POST ACQUISITION- DUTIES
AND
CHALLENGES
Once the acquisition is done and all formalities are complied, the process still does not end here, the main and the most vital task begins from here. Acquisition can be done by taking the votes from the majority and acceptance from the regulators but sustenance of company after acquisition still remains a big question. There are various factors that needs to be considered post acquisition like- financial restructuring of the company, shareholding, collaboration of the two companies via integration of technology, ideas, workforce, etc. DUTIES
1. The first and foremost duty post acquisition is to ensure that the main agenda for which the
company (target company) was formed is maintained at the same level in terms of brand identity, transparency, ethics and customer loyalty.
2. A proper integration and alignment of ideas and operations between the two companies
should be done so that the target can be achieved more efficiently without compromising on anything.
3. One must ensure that the business being conducted is in compliance with government
framework and the regulations guiding it.
4. Coming to the duties one must follow towards the stakeholders, transparency should be
maintained with them, they should be aware of their rights, liabilities and the performance of the company. There should be clear and continuous communication between all the stakeholders of the company.
5. A proper meeting discussing roles and responsibilities should be conducted so that there is a
clear picture in the minds of the employees and shareholders as to how the business will be carried forward.
CHALLENGES
1. Sustenance remains the most vital challenge with respect to acquisitions as there can be
instances where the company fails to perform post acquisition because of which the objective for which the acquisition was done could not be achieved.
2. Sometimes the identity of the brand is lost while trying to fit in with the acquirer company
as there could be change in the management styles and operations.
3. Cultural clashes is very common post acquisition. There could be various reasons for this
like the flexible environment in startups may not be same as those of the established entities, the working culture differs, ethics and morals might also be different.
4. The very purpose for which the acquisition was done that is integration of innovation
technology and agility could only be done in theoretical aspect and not practical, as there can be resistance to change among the employees.
5. In most cases, there will be difference in terms of ideas and innovation with regard to how
the company should grow, what strategies are to be adopted, where the investments are to be made and many more.
CONCLUSION
Concluding with what the future holds for these startups and its acquisition. As we can see from the example of HUL and Minimalist that startups are going to play an important role in shaping the future markets either by buying or being bought. Startup acquisition will be an important strategy adopted by entities to be digitally advanced without having to bring a vast change in the internal working. In future acquisitions will increasingly focus on creating ecosystems of innovation rather than standalone deals, fostering collaboration across multiple startups and established corporates to solve complex market challenges. Since this sector is having a promising future, a better environment for the same should be made with stricter regulations and compliance.
Regulators like CCI, SEBI should be more vigilant to ensure that market is not hampered, there is no unfair strategy being adopted and rights of the shareholders are being protected. Also more focus should be given on data protection laws and its compliance in order to safeguard consumer rights in the D2C market. Lastly, more investments should be made in the digital infrastructure, preparing the workforce for smooth technology adaption during acquisitions.