France’s Lactalis, the world’s largest dairy products group, will soon buy out Hyderabad-based Tirumala Milk Products for $275 -300 million, sources said.
Rothschild advised Lactalis on the deal, they said. Shankar Narayan, the managing director of the Indian arm of private equity giant The Carlyle Group, which has a fifth of Tirumala’s shares, confirmed the development on Tuesday. Tirumala’s founders own the remaining 80 per cent in the company. The Carlyle Group bought its shares for about $22 million in 2010.
Lactalis has an annual turnover of about $21 billion (Rs 1.3 lakh crore). Tirumala, established in 1998, had a turnover of Rs 1,424 crore for 2012-13. The Hyderabad company makes a wide range of dairy products, including sweets, flavoured milk, curd, milk powder and ice-cream.
India is the world’s largest milk producer, accounting for nearly a fifth of the world’s produce. Yet, private equity deals in the dairy sector have remained scarce. Among the major ones, Motilal Oswal, IDFC & IFC have put money in Parag Milks and IFC invested $7 million in Modern Dairies in 2008.
A report by the Associated Chambers of Commerce and Industry of India sees the dairy industry in India reaching Rs 5 lakh crore in turnover by 2015. It said production would rise to about 190 million tonnes (mt) in 2015 from 123 mt in 2011.