Singapore's Temasek seeks CCI nod to acquire 10% stake in Haldiram

Singapore's sovereign wealth fund Temasek Holdings has sought approval from the Competition Commission of India (CCI) to acquire about 10 per cent stake in Haldiram Snacks Food. 

Temasek will acquire a stake in India's largest packed snack and sweets company and restaurant operator Haldiram Snacks Food through its arm Jongsong Investments Pte. 

"The proposed transaction entails the acquisition of less than 10 per cent of the issued and paid-up equity share capital of the target (Haldiram Snacks Food Pvt Ltd). 

"The...transaction is in the nature of an acquisition of shares, voting rights and falls under section 5 of the Competition Act, 2002," said a notice filed with the CCI on March 20. 

In its submission to the CCI, the parties (Jongsong Investments and Haldiram Snacks Foods) asserted that the proposed transaction does not give rise to any competition law concerns irrespective of the manner in which the markets are defined.

However, to assist the CCI in its assessment, the relevant markets may be considered as the broader market for the manufacturing and the sale of packaged food products in India, they added. 

Additionally, narrower markets may be identified within this segment, including the manufacturing and sale of snacks, sweets, ready-to-eat products, dairy products, bakery products, chocolates, and non-carbonated ready-to-drink beverages. 

According to industry sources, Temasek will acquire about a 10 per cent stake in Haldiram Snacks Food at a valuation of $10 billion. 

The Agarwal family, promoters of Haldiram Snacks Food, may rope in another investor for selling some more stake in the company which had a revenue of over Rs 12,500 crore in FY24, they noted. 

The agreement with Temasek came after months of negotiations as several PE firms, including Blackstone, Alpha Wave Global and Bain Capital-led consortiums, were in the race to pick up a stake in Haldiram Snacks Food. 

The Agarwal family may also opt for the IPO (Initial public offering) route next year to capitalise on India's buoyant stock market. 

Earlier, the promoters were intending to divest a larger portion. However, they have decided to offload a minority stake only.

This cash infusion will help Haldiram Snacks Food to fund its expansion plans and expedite its journey in the domestic as well as some of the foreign markets, where it has a presence. 

Haldiram Snacks Food is the combined business of the two fractions of the Haldiram family - Delhi and Nagpur.

The National Company Law Tribunal has already approved the process of merger of the two fractions, while other regulatory approvals are awaited. 

Established in 1937 as a retail sweets and namkeen shop in Bikaner, Rajasthan by Ganga Bhishen Agarwal, Haldiram products are now sold in over 80 countries. 

In 2022, it was announced that the packaged snacks businesses of Delhi-based Haldiram Snacks and Nagpur-based Haldiram Foods International would be first demerged and then merged into an entity named Haldiram Snacks Food.