Mumabi, NFAPost: Eastern Condiments, leading South Indian spice company owned by Meeran family, will sell its stake to Norwegian consumer major Orkla-owned MTR Goods.
In a bid to strengthen its footprint in the fast-growing Indian branded spice market and double its sales, Norwegian consumer major
Orkla announced the acquisition of a majority stake in the Eastern for a total value of Rs 2000 crore. As per the announcement, Orkla will pick up nearly 68% stake through its wholly-owned subsidiary MTR Foods, which it had acquired earlier in 2007.
Oslo-headquartered 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 select markets in Central Europe and India.
In addition to 41.8% stake from the promoter Meeran family, Orkla’s MTR Foods will buy the entire 26% stake held by McCormick Ingredients in Eastern Condiments.
As per the deal agreement, the first step will be filing an application for merger of Eastern into MTR. Following this the merged entity will be jointly owned by Orkla and the two brother’s Firoz and Navas Meeran, with an ownership stake of 90.01% and 9.99%, respectively.
According to Arvian Research the acquisition will pave the way for MTR to own both vegetarian and nonvegetarian food products in blended and single categories.
“MTR is a pure vegetarian portfolio. Eastern Condiments, established in 1983 by Mr ME Meeran, plays in both vegetarin and non-veg products. Eastern total turnover touched Rs 900 crore during the last 12 month ending June 30, 2020. Majority of its revenue comes from Kerala and the rest from outside kerala and via export,” said Arvian Research.
Arvian Research also states the acquisition also will fuel the growth of branded spices from unorganised marketing strategy as the consumer preference is moving towards convenience and hygiene.
Commenting on the development, Eastern Condiments chairman Navas Meeran said Orkla is known for its strong, local brands and holds leadership positions across multiple FMCG categories in several markets.
“Orkla has a solid track record of building leading food brands based on a strong organisational culture and company values. Together with MTR, and as part of Orkla, we will have a stronger platform for our successful operations,” said Eastern Condiments chairman Navas Meeran.
Indian spices segment witnessed a big transaction with ITC announcing the acquisition of spices manufacturer Sunrise Foods in early this year. Sunrise Foods is a market leader in Eastern India. The acquisition was fixed for around Rs 2,150 crore.