Orkla has entered into an agreement to acquire 67.8 per cent of the shares in Eastern Condiments Private Limited in Kochi. With this move, Orkla will double its sales in India.
Norway headquartered Orkla already holds a strong position in the Indian branded food market with the well-known MTR brand which has grown its sales five-fold since it was acquired by Orkla in 2007.
For the last 12 months ending 30 June 2020, MTR had a turnover of Rs 9.2 billion (approx. NOK 1.1 billion). With this transaction, 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.
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 Orkla’s 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 merger will result in the union of two iconic Indian brands. The merged business will create a solid base for future growth in the Indian branded food market, driven by the positions of Eastern and MTR in spices and packaged food categories. With this transaction Orkla will establish a platform for further growth in India in several categories.
The parties have agreed on a purchase price that values Eastern (100 per cent) at Rs 20 billion (approx. NOK 2.4 billion) on a debt and cash free basis. The acquirer is Orkla’s wholly owned subsidiary MTR Foods Private Limited.
Eastern offers a mix of non-vegetarian and vegetarian food products largely in the categories of blended and single spices. MTR has, and will continue to have, a purely vegetarian product range in spices and packaged foods. Together, the companies will have an even stronger offering to the Indian consumer.