INDIA – Reliance Industries, an Indian conglomerate, is set to acquire Ravalgaon Sugar Farm Ltd (RCPL), a prominent sweets and toffees manufacturer in India, through its wholly owned subsidiary, Reliance Consumer Products.
Reliance deals with the exploration and production of oil and gas, manufacture of petroleum products, polyester products, polyester intermediates, plastics, polymer intermediates, chemicals, synthetic textiles, and fabrics.
The acquisition, valued at US$3.3 million, includes the transfer of trademarks, recipes, and all intellectual property rights associated with RCPL’s sugar boiled confectionery business.
The filing on the Bombay Stock Exchange outlines that the transaction is contingent upon fulfilling certain conditions precedent, including shareholders’ approval.
The deal specifically focuses on the transfer of intellectual property, with RCPL retaining other assets such as property, land, plant, building, equipment, and machinery.
According to RCPL, it has found it difficult in recent years to sustain its sugar boiled confectionery business. It has lost market share owing to a surge in competition from both organised and unorganised players in this industry.
At the same time, its profitability has been affected by the sustained increase in raw material, energy and labour prices, without the ability to effectively pass on the input price increases to its customers beyond the Re 1 price point, it said.
The agreement imposes restrictions on RCPL, preventing it from engaging in any business activity related to the products associated with the acquired intellectual property.
“Under the agreement, RCPL will be restricted from directly or indirectly manufacturing, sourcing, marketing, distributing or engaging in any business activity which deals with the products of the company as well as sugar confectionary, jelly confectionary, fruit confectionary, and all products using, under or associated with the Intellectual Property”, the filing read.
Ravalgaon Sugar Farm is known for its confectionery brands, including Pan Pasand Gold, Cheer, Mango Mood, Coffee Break, Tutty Fruit, Assorted Center, as well as toffee products like Choco Cream and Supreme.
This acquisition strengthens Reliance’s presence in the consumer goods sector, complementing its existing brands like Snactac, a savory snacks maker, Good Life, a plant-based foods producer, and Desi Kitchen, offering a range of blended spices, instant drink mixes, flours, cooking pastes, and millets.
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