US-based food major Cargill will acquire Wipro's Sunflower Vanaspati brand, the company said in a communique on Monday. Cargill did not disclose the deal size. But analysts have pegged it at Rs 40 crore. The transaction would not involve any sale of assets apart from the product brand, the statement said.
This will be Cargill's fourth acquisition in six years, which has an estimated turnover of Rs 4,000 crore, ranking third in the pecking order of edible oil companies after Adani Wilmar and Ruchi Soya in India.
The four acquisitions include Gemini Sunflower Oil from Paras Foods in 2006, Rath, a vanaspati brand from Agrotech in 2010, Sweekar Sunflower Oil from Marico in 2011 and the current acquisition from Wipro.
Wipro's Sunflower Vanaspati is a premium brand in Maharashtra with sales of about Rs 30 crore. Cargill, with its acquisitions, has looked at brands that have a strong local presence, analysts said. Gemini, for instance, is strong in Maharashtra, while Rath is strong in the north. Only Sweekar, much like Cargill's inhouse Nature Fresh brand, has a national footprint.
"This acquisition strengthens Cargill's existing portfolio of leading edible oil and vanaspati brands and also expands its market reach in India's palm oil and its derivatives including vanaspati market," Cargill's India chairman Siraj Chaudhry said.
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"Acquiring Sunflower Vanaspati underscores Cargill's long-term commitment to growing our consumer food business in India. It is an excellent fit with our existing strong brand portfolio through which we serve a significant consumer base across the country," Chaudhry added.
For Wipro, the sale of its vanaspati brand is in keeping with its strategy of existing non-core segments. The company has been looking to get out of categories such as diapers besides vanaspati for some time now.
Both the categories together gave Wipro about Rs 40-45 crore in terms of revenues.
