INDIA – Orkla, a Branded Consumer Goods business, through its wholly owned subsidiary MTR Foods Private Limited, has signed agreements to purchase a 67.8 per cent ownership stake in Eastern Condiments Private Limited, a package food company.
Orkla will acquire 41.8 per cent from members of the Meeran family and will acquire the entire ownership stake held by McCormick Ingredients SE Asia PTE. Ltd, 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).
With this move, the Norwegian consumer goods supplier will double its sales in India. Orkla said it already holds a strong position in the Indian branded food market with the MTR brand which has grown its sales five-fold since it was acquired by it in 2007.
“With the transaction announced today, 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,” said Orkla in a statement.
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 percent and 9.99 percent, respectively, the statement added.
The agreement to acquire a majority stake in Eastern is subject to the approval of the Competition Commission of India. The subsequent merger process is expected to take approximately 15 months after completion of the acquisition.
The agreement with the Meeran brothers includes a long-term mechanism for Orkla to obtain full ownership of the joint entity.
Eastern has seven production facilities in four states in India and employs around 2,955 people. It was established in 1983 by M E Meeran.
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.
MTR was established in 1924 and has been a part of Orkla since 2007. Since being acquired by Orkla, MTR has been recognised for its excellence in brand management, capable and stable management, a solid financial position, and world class standards in food safety, EHS and productivity enhancements.
In addition to having seen strong domestic growth, its presence has been expanded to 32 countries around the world, with North America, Australia and New Zealand being the major markets.
MTR, which has a total workforce of 1,018 employees, has two production facilities which are located in Bangalore, Karnataka and Pune, Maharashtra. Its headquarters are located in Bangalore.
Orkla is a leading supplier of branded consumer goods and concept solutions to the consumer, out-of-home and bakery markets in the Nordics, Baltics and selected markets in Central Europe and India, the statement added.
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