BSE-listed Amrit Banaspati has sold off its edible oil business to Bunge India, the subsidiary of New York-based Bunge Ltd, for Rs 221 crore. Bunge will also pay an additional Rs 104 crore for buying the trademark ‘Gagan' owned by Amrit Corporation, the flagship company of the Amrit Group.

Bunge will also shell out Rs 47 crore as non-compete fee of Rs 47 crore to key promoters Mr Naresh Kumar Bajaj, Mr Ashwin Kumar Bajaj and Mr Vikram Kumar Bajaj.

“Further, the purchaser, considering the expertise and long association of the promoters with the edible oil business, required that the key promoters execute non-compete undertaking for a period of five years,” Amrit Banaspati said in a press release on Wednesday. Subsequent to the transaction, the company will continue to operate a commodities trading division and will explore venturing into real estate and other promising business opportunities, said Mr N. K. Bajaj, Chairman and Managing Director, Amrit Banaspati.

The Board has approved Bunge's offer and will also recommend an appropriate dividend to shareholders from proceeds of the sale, he added. Bunge's acquisition includes Amrit Banaspati's manufacturing facility at Rajpura in Punjab, rights to its brands and trademarks, sales and distribution business and the transfer of employees pertaining to edible oils and fats business. The transaction, which is subject to approval by shareholders of Amrit Banaspati and Amrit Corp, has been unanimously approved and recommended by the Boards of Directors of both companies, said the press release.

Mr Christopher White, CEO, Bunge Asia, said, the acquisition enables the company to expand distribution reach, manufacturing base and brand portfolio to serve a growing customer base.

Mr Adhiraj Sarin, Managing Director, Bunge India, added, ‘Amrit', ‘Gagan' and ‘Ginni' brands, coupled with employees and a strong distribution network, open up opportunities for synergistic collaboration with Bunge India, creating incremental value for the combined operations.

Shares of Amrit Banaspati on BSE gained seven per cent to Rs 245, while Amrit Corporation was up 18 per cent at Rs 301 on Wednesday.

suresh@thehindu.co.in

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