 "Tata")
After weeks of drawn-out negotiations, Tata Consumer Products Ltd (TCPL) emerged as the favourite to acquire Capital Foods Pvt Ltd, the manufacturer of food products under the Ching's Secret and Smith & Jones brands, according to a report by The Economic Times (ET).
Final rounds of discussions are ongoing to decide whether the existing shareholders will exit entirely. TCPL will first buy 65-70 per cent of the firm from its three investors and will acquire the rest over a period of time. The company has been valued at Rs 5,500. Other rivals eyeing a stake include Nestle SA and Kotak Mahindra is advising the Kraft Heinz Co. TCPL on the deal.
In 2022, Capital Foods' three main shareholders decided to put the company up for sale. The three are US private equity group General Atlantic with a 35 per cent stake; Invus Group, a European family office with a 40 per cent stake; and Ajay Gupta (25 per cent), founder chairman of Capital Foods.
Sources told ET that Gupta is likely to continue with the company for the time being.
Capital Foods had attracted interest from various multinationals and homegrown companies, including ITC, Hindustan Unilever, Orkla, Nissin Foods and McCormick. The asking price had been much higher at close to $1.5 billion (Rs 12,442 crore).
In September, Business Standard reported that TCPL has "narrowed its universe" by identifying five key categories for its upcoming product launches. These categories represent its current core offerings, including tea, coffee, and salt.
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Within the pantry segment, the company will explore pulses, spices, staples, dry fruits, and ready-to-cook opportunities.
The mini-meals category will see TCPL expanding its offerings in the breakfast cereal, ready-to-eat, and snack markets.
Ajit Krishnakumar, chief operating officer of TCPL, told BS: "We have taken a strategic approach to identifying key platforms we want to play in. After evaluating several factors, including market opportunity, category growth, profitability, our capabilities, including distribution and research and development, and our overall competitive edge, we've narrowed the universe down to five key platforms."
