Indian food and edible oils producer Agro Tech Foods is to buy its local peer Del Monte Foods Private Limited (DMFPL), according to a BSE filing today (14 November).
Financial terms of the deal were not disclosed, but local reports from The Economic Times indicate it could be worth Rs13bn ($154m).
Following the deal, the Act II popcorn and Sundrop spreads producer added it would be rebranding to Sundrop Brands, "reflecting a renewed commitment to its growth aspirations under new ownership".
The group is snapping up DMFPL from a joint venture between Bharti Group and Del Monte Pacific Limited's (DMPL) Indian leg. The former held a 59.29% stake in the business, while the latter owned the remaining 40.71% of shares.
Following the transaction, both DMPL's Indian arm and Bharti will become public shareholders of the newly formed Sundrop Brands.
It is unclear at this stage what stake sizes have been proposed, though in the stock exchange filing, Harjeet Kohli, joint managing director of Bharti Enterprises said the deal "makes Bharti the second largest shareholder in the combined platform".
He added: "Leveraging significant synergies on the back of a profitable business model, trusted brands and a loyal consumer base, this transaction is set to bolster the scale and margin profile of the platform, potentially accelerating shareholder returns and offering a more diverse portfolio of high quality products to consumers.
"We look forward to the exciting journey ahead, with all engines fired up for accelerated growth.”
Acquiring the brand grants Agro Tech "an exclusive, perpetual license" for the Indian Del Monte brand. It is also expected to enable the company to expand further into retail and foodservice channels.
DMFPL's portfolio includes dried pastas, olive oils, and tinned fruit and vegetables and fruit drinks.
Agro Tech will also take over DMFPL's production and R&D sites in Ludhiana, Punjab, and Hosur, Tamil Nadu, which will help to build its "expansion and the development of new product lines tailored to Indian consumers".
Nitish Bajaj has been appointed group managing director of newly formed Sundrop Brands.
His previous experience includes leadership roles at pharmaceutical group Pirama, FMCG major Reckitt and Heinz's Indian branch.
Commenting on the deal, Asheesh Kumar Sharma, CEO and executive director of Agro Tech Foods, said: “Working closely with Nitish Bajaj, we intend to deliver maximum value to all stakeholders through our enhanced mission of creating innovative, delicious and convenient food solutions for the modern consumer".
In a statement, DMPL's India business said: “India has been an exciting and flourishing market for Del Monte, and we are proud of the brand’s journey and impact on the Indian food industry.
"With Sundrop Brands’ experience and commitment, we believe the Del Monte brand will reach new heights in India. This transaction supports our strategic focus on core markets and partnerships that drive growth.”
