GODREJ FAMILY AGREEMENT: SIX-YEAR NON-COMPETE CLAUSE EXCEPT FOR REALTY | ALL YOU NEED TO KNOW

In a significant development within the 127-year-old Godrej Group, a carefully negotiated business split has been reached among family members, outlining terms that limit competition among themselves for a specified period. Under this agreement, family members have agreed not to compete with each other in most sectors for a duration of six years, with the exception of one key area: real estate.

As per reports emerging on May 2, realty is the sole domain in which family members are permitted to compete during this initial six-year period. However, in all other sectors, competition among family members will be allowed once the non-compete period concludes. It's worth noting that any competition in these sectors post the specified timeframe will not be under the Godrej brand name.

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According to The Economic Times report, this non-compete arrangement is a common practice in family settlement cases, both in India and globally. The agreement officially came into effect on April 30, initiating the non-compete period.

According to the terms outlined in the family settlement agreement, Adi Godrej and his younger brother Nadir will have exclusive rights to use the Godrej brand name across various sectors, including FMCG, financial services, pharmaceuticals, and chemicals. Conversely, Jamshyd and his sister Smita Crishna, cousins of Adi and Nadir, will have exclusive rights to the Godrej brand in sectors such as consumer durables, construction materials, and software services, among others.

However, both parties are allowed to utilize the Godrej name in the real estate sector for development and marketing activities. Notably, Jamshyd and Smita hold stakes in real estate through the unlisted Godrej & Boyce, while Adi and Nadir oversee the listed Godrej Properties.

The report added that the important aspect of the settlement is that no royalty will be required for using the brand name. Moreover, after the initial six-year period, family groups are permitted to enter each other's exclusive business domains without using the Godrej brand name.

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Additionally, both groups have the liberty to venture into sectors where neither currently operates, using the Godrej brand with specified differentiators at the group level. These sectors include medical services, hospitals, hospitality, and education.

2024-05-04T13:36:23Z dg43tfdfdgfd