Tata Consumer Products Acquires Capital Foods & Organic India TCP will acquire Capital Foods and Organic India in two different agreements
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Tata Consumer Products announced that it has signed definitive agreements to acquire 100 per cent equity shares of Capital Foods, owner of the brands 'Ching's Secret' and 'Smith & Jones', in a phased manner. 75 per cent of the equity shareholding will be acquired upfront and the balance 25 per cent shareholding will be acquired within the next three years. This move is consistent with Tata Consumer's strategic intent to expand its product portfolio and its target addressable market in fast-growing/high-margin categories.
The overall size of the categories in which Capital Foods operates in is estimated at INR 21,400 crore. Structural growth drivers for the category include continued growth in income levels, evolving consumer preferences leading to increased salience of global cuisines in in-home cooking and increasing need for convenience.
Ajay Gupta, founder of Capital Foods said, "Today is a historic day for Capital Foods. To be associated with the iconic Tata Group is a dream come true for me. Like Capital Foods, Tata is a home-grown brand that is globally recognised. Tata Consumer Products is a multi-conglomerate that spans the globe with quality food ingredients and products. Together, Tata and Capital Foods can create a multinational culinary brand that includes multiple food categories. The journey ahead is going to be a giant leap for us, full of endless possibilities and definitely exhilarating!"
Besides, TCP has signed definitive agreements to acquire up to 100 per cent of the issued equity share capital of Organic India.
This acquisition will create a Health & Wellness platform for Tata Consumer Products.
The total addressable market for the categories that Organic India is present in is INR 7,000 crore in India and INR 75,000 crore in international markets where Tata Consumer has a strong presence. This acquisition will provide significant synergy benefits in distribution, logistics and overheads apart from driving portfolio premiumization and unlocking additional channels and new markets. Structural growth drivers for this portfolio include increasing demand for Health & Wellness products, growing consumer awareness around wellness and changing consumer preferences.
Sunil D'Souza, MD & CEO, Tata Consumer Products said, "We are excited about bringing Organic India into Tata Consumer Products. This transaction aligns well with Tata Consumer's overall strategic objectives presents exciting market opportunities in the rapidly growing Health & Wellness segment. In addition, Organic India has built very strong relationships with farmers to create a robust organic supply chain with a trusted brand and a loyal consumer base. Organic India's differentiated products and robust supply chain together with Tata Consumer's distribution strength."
