Tata Consumer nixes talks with Chauhans on Rs 7K-crore Bisleri deal

The companies could not agree on valuation, say sources

Tata Consumer Products (TCPL) said on Friday that it had ceased negotiations with Bisleri International over a potential acquisition.

The firm said in a stock exchange notification that it “has not entered into any definitive agreement or binding commitment on this matter.”

Last November, Ramesh Chauhan, the chairman of Bisleri International, had told Business Standard that he was in discussion with TCPL to sell a majority stake in the company for Rs 6,000-7,000 crore, adding that he expected the deal to be completed in 7-8 months.

According to a source in the know, the two parties failed to agree on valuation.

Chauhan declined to comment on the deal being called off and also did not comment if the company was still looking to sell its majority stake in the company.

In February, Sunil D’Souza, managing director and chief executive officer of TCPL, told Business Standard when asked about acquisitions it plans to make, “We are not in the bidding game and will not buy at all costs. We are mindful that we create value with those acquisitions.”

Water king

• Bisleri projects sales worth Rs 2,500 crore in FY23 and a net profit of over Rs 200 crore
• Bisleri was originally an Italian company set up by Felice Bisleri
• Bisleri entered Mumbai in 1965 with its packaged drinking water brand
• Four years later, Ramesh Chauhan and his brothers acquired the firm for Rs 4 lakh
• Firm has over 122 operational plants and 4,500 distributors across India and in neighbouring countries

Bisleri was originally an Italian company set up by Felice Bisleri. It entered Mumbai in 1965 with its packaged drinking water brand. Four years later, Ramesh Chauhan and his brothers acquired the firm for Rs 4 lakh, according to market information.

At present, it has over 122 operational plants and 4,500 distributors across India and in neighbouring countries. According to media reports, Bisleri is likely to clock sales of Rs 2,500 crore and earn a net profit of over Rs 200 crore in financial year 2022-23 (FY23). In FY22, TCPL’s revenue from operations stood at Rs 12,425 crore.

If the deal had gone through, TCPL would have become the largest in the Indian fast-moving consumer goods space. The biggest deal in this space so far, happened in April 2020, when Hindustan Unilever acquired Horlicks from GSK for Rs 3,045 crore.

“Sentiment in the market for the majority stake buyout of Bisleri was positive. But it was all dependent on the structure of the deal,” said Vishal Gutka, vice-president of research (consumer and retail sector), Phillip Capital India.

D’Souza had also said earlier that TCPL is working on a road map of how it plans to enter the FMCG space.

“But, unless we build a strong food and beverages (F&B) company, we will not jump in. We will start moving into the FMCG space once we are confident that the runway or the big pieces of the F&B pieces have been tackled,” D’Souza said.