Norway-based owner of MTR, Orkla has announced that it has entered into a consensus to procure a majority stake in Kochi-based Company, Eastern Condiments.
The company declared that Orkla Foods, through its subsidiary unit MTR, is concordant to purchase 41.8% and 26% ownership stake in Eastern from Meeran family McCormick respectively, thus gaining 67.8% ownership stake post the transactions.
At present, Eastern is owned by the Meeran family (74%) and McCormick (26%).
Orkla said that the organization has decided to purchase Eastern at Rs. 2,000 crore on a debt and cash free basis. The entire processing of this deal started from May 22 and was in the last stage of getting finalized.
Jaan Ivar Semlitsch, President of Orkla stated- “This marks a remarkable step for Orkla towards making our footprints robust in core geographies. Eastern and MTR will collectively generate a solid platform in the rapidly flourishing Indian market.”
Avendus Capital served as the the exclusive financial advisor to Eastern Condiments, Meeran family and McCormick through this entire deal. Anshul Agarwal, Executive Director and Co-Head of Consumer and Business Services, Avendus Capital pronounced- “The spices industry has a glowing past for growth in India, with a shift from home processed and unorganized to branded spices driven by comfort and hygiene preferences. This deal is indication of the extreme interest in branded spices from large companies.”
MTR witnessed a turnover of Rs. 920 crore over a period of 1 year ending on 30th June.
Following execution of the transactions, an application will be filed with the objective of integrating Eastern and MTR together. These two combined companies will be jointly hold by Orkla and the two brothers Firoz and Navas Meeran, 90.01% and 9.99% shares respectively, the company informed.
MTR’s Chief Executive Sanjay Sharma declared that the Indian branded food and spice markets are multiplying in double digits, and that the company expects positive long-haul demand dynamics with rising purchasing power and more urban lifestyles.
Eastern sells a variety of non-vegetarian and vegetarian food products in the categories of blended and unblended spices while MTR vends purely vegetarian spices and packaged foods. “Being a part of Orkla with MTR, we will have a stronger platform to boost up our operations,” Navas Meeran, Chairman of Eastern optimistically stated.