INDIA – Blackstone, the world’s largest alternative asset manager, has dropped plans to acquire a majority stake in the Haldiram’s, snacks business of India, opting for a 20% stake at a valuation of US$8 billion, which is still a sticking point.
There was a disconnect over valuation. Haldiram’s wanted to value the snacks business at US$12 billion, but Blackstone aiming to seal the deal at $8 billion, two of the sources familiar with the situation said.
In May Reuters reported a consortium led by Blackstone was eyeing a stake of 75% in the business and had made a non-binding bid.
However, those talks did not materialise as Haldiram’s is no longer keen to sell a big stake, Reuter reported quoting a source, who sought anonymity as the discussions are private.
Haldiram’s, which Euromonitor International estimates has a share of almost 13% of India’s $6.2-billion market for savoury snacks, has more than 150 restaurants, but many foreign investors are salivating over its popular snacks business.
“Blackstone is keen to close the transaction as a lot of effort has gone into it,” said one source with direct knowledge of the issue.
While some two sources put the size of the stake under discussion at 20%, another source put it in a range of 15% to 20%, and said Blackstone remains keen to deploy capital in the company.
Other companies are also scrambling for a minority stake in the Indian business, two of the sources said.
They include Bain Capital, Singapore state investor Temasek and Abu Dhabi Investment Authority (ADIA), though they gave no details of their plans.
Last year, Reuters reported India’s Tata Group was in talks with Haldiram’s to acquire a majority stake in the entire snacks and restaurants business. At the time, Haldiram’s was seeking a valuation of $10 billion, but those talks ended, and no Tata deal is in the works.
Haldiram’s started in 1937 with a tiny shop in the city of Bikaner in the western desert state of Rajasthan. One of its most popular snacks is “bhujia”, a crispy fried Indian snack made with flour, herbs and spices and sold for as little as 10 rupees (US12 cents) in mom-and-pop store.
Besides domestic popularity, the company also has a strong presence on global shelves, with over 400 products including sweets, namkeen, confectionery, ready-to-eat meals, frozen foods and non-carbonated beverages.
The company is present across 100 countries, including the US and European market. Sources cited in the report mentioned that the group’s total revenue is estimated to exceed Rs 10,000 crore (around $1.2 billion) mark.
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