Agro Tech Foods, backed by Samara Capital, will acquire Del Monte Foods, a joint venture of Bharti Enterprises and Del Monte Pacific, in a share swap deal valued at over Rs 1,300 crore.
The transaction will see Agro Tech issue 13.3 million shares at Rs 975.5 apiece to the current shareholders – Bharti (59.29%) and Del Monte Pacific (40.7%) – as consideration for their ownership, it said on Thursday. Del Monte will become a wholly-owned subsidiary of Agro Tech Foods. The latter (Agro Tech) will rebrand as Sundrop Brands.
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Notably, Bharti Enterprises will become the second-largest shareholder in Agro Tech, following completion of the deal, holding 21% stake. Samara Capital will now be the largest shareholder in Agro Tech, at 31%, from 51%. Del Monte Pacific will get 14% stake in the company, Agro Tech said.
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Additionally, Agro Tech will acquire an exclusive, perpetual license for the Del Monte brand in India, ensuring long-term access to the brand for its growing consumer base.
“There are no plans to exit food,” Harjeet Kohli, joint managing director, Bharti Enterprises, said in a conversation with FE. “If anything, we intend to partake of growth in the foods category,” he added.
“The plan is to aggregate the food business of Agro Tech, which has Sundrop edible oil and Act II popcorn, with that of Del Monte, which offers branded processed food and beverages. While both businesses can combine and grow organically, there is nothing preventing the company from acquiring brands in adjacent spaces,” Kohli said of the way forward for the company.
Bharti had entered the foods segment in 2004 through a joint venture with invesment bank EL Rothschild, called FieldFresh Foods. The JV was into producing and exporting fresh fruits and vegetables.
By 2007, Singapore-based Del Monte Pacific had acquired a 40.1% stake in FieldFresh for $20.8 million,
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