Norwegian conglomerate Orkla, through its Indian wholly-owned subsidiary MTR Foods Private Ltd, has signed an agreement to acquire a 67.8 per cent ownership stake in Eastern Condiments for ₹1,356 crore.

Kochi-headquartered Eastern Condiments is valued at ₹2,000 crore on a debt and cash-free basis. The deal is subject to Competition Commission of India approvals, the company said in a statement.

Orkla will acquire 41.8 per cent stake from Meeran family, which had set up Eastern in 1983, and remaining 26 per cent stake from McCormick Ingredients SE Asia PTE to take its total to 67.8 per cent stake.

Following the completion of these transactions, Eastern will be merged with MTR. The merged company will be jointly owned by Orkla and the two brothers - Firoz (Managing Director of Eastern) and Navas Meeran (Chairman of Eastern) - with 90.01 per cent and 9.99 per cent stakes, respectively.

Avendus Capital was the financial advisor to Eastern Condiments, Meeran family and McCormick for the deal.

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“The spices industry has a long runway for growth in India, with a shift from home processed and unorganised to branded spices driven by convenience and hygiene preferences. Eastern and MTR combined, have significant synergy potential in terms of product portfolio and geography,” Anshul Agarwal, Executive Director and Co-head of Consumer, Financial Institutions Group and Business Services at Avendus Capital, said.

“This deal is a testament to the strong interest in branded spices from large F&B players, given the value-added nature of the product and high growth potential of the segment,” he added.

Bengaluru-headquartered MTR, which was set up in 1924, has production facilities in Bengaluru and Pune.

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