Tata Consumer Products to buy Capital Foods, Organic India

Tata Consumer Products to acquire Capital Foods and Organic India in a deal worth ₹7,000 crore.

Published on: Jan 12, 2024, 23:57:59 IST

By HT News Desk

Prefer HTon Google

Share via

Copy link

Tata Consumer Products Ltd (TCPL) announced on Friday its acquisition plans for Capital Foods and Organic India, backed by Fab India, with a combined enterprise value of ₹7,000 crore.

The arm of Tata Group is set to secure 100 per cent equity shares of Capital Foods, including brands like Ching’s Secret and Smith & Jones, at an enterprise valuation of ₹5,100 crore. Additionally, TCPL will acquire Organic India, a player in the health and wellness sector, for an enterprise value of ₹1,900 crore.

"The Board of Directors approved the acquisition of 100 percent of the issued equity share capital of Capital Foods Private Limited. The Company, thereafter, has entered into Share Purchase Agreement (SPA) and Shareholders’ Agreement (SHA) with the existing promoters and shareholders of the target company to acquire the entire issued equity share capital in a phased manner," said Tata Consumer in an regulatory filing.

TCPL has formalised a Share Purchase Agreement and Shareholders’ Agreement with the current promoters and shareholders of Capital Foods, sealing the acquisition of 75 per cent equity shareholding through an all-cash transaction. The remaining 25 per cent will be acquired over the next three years.

Also read: Mukesh Ambani's net worth crosses $100 billion, dethrones Gautam Adani as Asia's richest man

How the deals are expected to benefit TCPL?

TCPL's entry into the packed food segment aligns with its FMCG transformation.

Acquiring Organic India and Capital Foods, with 75 per cent of the latter's equity to be secured soon, reflects TCPL's commitment to high-growth segments. The Organic India deal, an all-cash transaction, aims to establish a robust health and wellness platform, with completion expected in three months.

"The acquisition is in line with the Company's strategic intent of entering into new adjacent high growth/ attractive margin categories in the food and beverage space. The acquisition will enable the creation of a health and wellness platform," it said.

Also read- Tech layoffs 2024: Flipkart, Amazon, Paytm, Google cut thousands of jobs; is AI the real villain?

The Capital Foods acquisition, set to conclude by March 31, presents synergy benefits in distribution and logistics, enhancing TCPL's product portfolio.

"There are significant synergy benefits with the existing businesses of Tata Consumer Products in areas spanning distribution, logistics, exports and overheads," it said.

With Organic India's market presence valued at ₹7,000 crore in India and ₹75,000 crore internationally, the move positions TCPL in a market estimated at ₹21,400 crore, reinforcing its FMCG foothold.

What Capital Foods said?

Capital Foods founder Ajay Gupta said: “Together, Tata and Capital Foods can create a multinational culinary brand that includes multiple food categories".

(Inputs from PTI)

ABOUT THE AUTHOR
HT News Desk
Follow the latest breaking news, major developments and agenda-setting stories from India and around the world with the newsdesk at Hindustan Times. Operating round the clock, the desk brings together experienced editors, reporters and correspondents to deliver fast, accurate and contextual reporting across subjects that influence public policy, governance, business, society and international affairs. The HT News Desk covers politics, elections, government policies, the economy, business and markets, science and technology, the environment, law and order, infrastructure, education, climate issues and geopolitics, while closely tracking developments across states, institutions and global capitals. The team also leads coverage of major breaking news events, policy announcements, court proceedings, natural disasters, public emergencies and significant international developments. Reports published by the newsdesk are based on information gathered from reporters on the ground, official statements, government agencies, court records, regulatory filings, recognised institutions and other authoritative sources. Stories undergo editorial scrutiny and verification processes to ensure accuracy, fairness and relevance, and are updated as events evolve and additional information becomes available. Whether covering a key political decision in New Delhi, an economic policy shift affecting millions, a landmark court ruling or a major global event, the HT News Desk aims to provide readers with reliable, fact-based journalism that delivers not only the latest developments but also the context and analysis needed to understand their wider implications.Read More

Tata Group

Stay updated with the latest Business News, stock market updates, petrol and diesel prices, gold and silver rates, income tax updates and major developments from India and across the world.