Bengaluru, Sep 4 (PTI) Oslo-headquartered Orkla Foods said on Friday it has entered into an agreement to acquire 67.8 per cent of the shares in Kochi-based Eastern Condiments Private Limited.
With this move, the Norwegian consumer goods supplier will double its sales in India, the company said in a statement.
Orkla said it already holds a strong position in the Indian branded food market with the MTR brand which has grown its sales five-fold since it was acquired by it in 2007.
For the last 12 months ending 30 June 2020, MTR had a turnover of Rs 920 crore.
'With the transaction announced today, Orkla will grow its position as one of the leading branded food players in India and have a platform for further growth in the spice category and in adjacent categories,' the statement said.
Orkla, through its wholly owned subsidiary MTR Foods Private Limited ('MTR'), has signed agreements to purchase a 41.8 per cent ownership stake in Eastern from members of the Meeran family and to acquire the entire ownership stake held by McCormick Ingredients SE Asia PTE. Ltd ('McCormick'), which will give Orkla a 67.8 per cent ownership stake after completion of the transactions.
Eastern is currently owned by the Meeran family (74 per cent) and McCormick (26 per cent).
Following completion of these transactions, a merger application will be filed with the intention of merging Eastern into Orklas wholly owned subsidiary MTR.
The merged company will be jointly owned by Orkla and the two brothers Firoz and Navas Meeran, with an ownership stake of 90.01 per cent and 9.99 per cent, respectively, the statement added.
The parties have agreed on a purchase price that values Eastern (100 per cent) at Rs 2,000 crore on a debt and cash free basis. The acquirer is Orklas wholly owned subsidiary MTR Foods Private Limited.
Eastern has seven production facilities in four states in India and employs around 2,955 people. It was established in 1983 by M E Meeran.
Orkla is a leading supplier of branded consumer goods and concept solutions to the consumer, out-of-home and bakery markets in the Nordics, Baltics and selected markets in Central Europe and India, the statement added.PTI RS SS PTI CPS CPS