Norway's Orkla has acquired 67.82% of the shares in India's Eastern Condiments Private Limited (Eastern) for approximately NOK 2.4 billion (€240 million) at enterprise value.
The acquisition, carried out through MTR Foods Private Limited (MTR Foods), makes Orkla a major employer in India, owning nine factories in six states that cater to the whole of India as well as exports.
Eastern was owned by the Meeran family (74%) and McCormick Ingredients South East Asia Private Limited (26%).
Orkla has purchased 41.82% of shares from members of the Meeran family and McCormick's entire ownership interest.
Eastern will be merged into MTR Foods, and Orkla will own 90.01% of the business, while the brothers Firoz and Navas Meeran will jointly own 9.99%.
The merger process is expected to take around 15 months, Orkla added.
'Iconic Indian Brands'
Orkla president and CEO Jaan Ivar Semlitsch said, "It is important for Orkla to deliver on our strategy of strengthening our footprint in our core areas. MTR Foods and Eastern are both iconic Indian brands in a rapidly growing Indian market.
"MTR Foods has been an amazing success story for Orkla, and sales revenues have increased five-fold since Orkla entered the picture in 2007. We are now looking forward to continuing our India journey."
Headquartered in Edappally in Kochi, Eastern operates seven factories in four different states in India and employs around 3,000 people.
It was established in 1983 by M. E. Meeran. The company generated a turnover of INR 9.0 billion (approx. NOK 1.1 billion) and normalised EBITDA of INR 1.1 billion (approx. NOK 129 million) in its financial year ended 30 June 2020.
The company achieved growth in turnover of close to 8% per year between 2014 to 2020.
Around half the turnover came from Kerala, and the other half from sales in other states in India and exports, Orkla said.
The company will be consolidated into Orkla's financial statements as of 1 April 2021.
"Eastern and MTR offer complementary products. Pursuant to the deal, we will now together be able to offer a broader selection of food products to Indian consumers," said EVP Atle Vidar Nagel-Johansen, CEO of Orkla Foods and chair of the board of MTR Foods.
MTR Foods, established in 1924, has been part of Orkla since 2007.
The company is recognised for its excellent brand-building, stable leadership, solid financial position, productivity improvements, and leading food safety and EHS standards.
In addition to good growth in India, MTR Foods' products are now available in 32 countries worldwide, of which North America, Australia, and New Zealand are the biggest markets.
MTR Foods, headquartered in Bangalore, has two factories in Bangalore, Karnataka, and Pune, Maharashtra.
The business has 1,018 employees and achieved a turnover of INR 9.2 billion (approx. NOK 1.2 billion) in 2020.
Sanjay Sharma, CEO of MTR Foods, commented, "Eastern and MTR Foods have products that are a good fit. The companies have an attractive pan-Indian geographical presence and good export possibilities.
"The Indian food and spice market shows double-digit growth. We see that a more urban lifestyle and greater buying power is having a positive long-term impact on demand for our products."
© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.