Coca-Cola leads race to acquire Kraft Heinz brands in India: Report

Coca-Cola has emerged as the frontrunner to acquire the consumer brand portfolio of Kraft Heinz for around Rs 4,000-5,000 crore, reported The Economic Times.

Coke and Zydus Cadila Group were in the running to acquire Kraft’s portfolio, which includes children’s milk additive Complan, Nycil talcum powder and energy drink powder Glucon D. In the final round, they were joined by a private consortium of Apax and Arpwood Partners, which emerged as a surprise bidder.

However, the seller tweaked the final deal contour, which led Coke to lead the race, said the publication in its report quoting sources. As per the report, the seller originally planned to sell just the Indian operations along with the brands. Later, however, it unexpectedly decided to sell the European holding company, registered in Italy, that houses the India operations and wanted the buyer to take over the tax losses of that entity.

In a communication with the bidders, Kraft Heinz said it will carve out all non-India businesses by demerging the European entity’s operations and subseqently convert it into a shell company hosting all the India investments and the tax losses totalling nearly Rs 500-600 crore relating to the European business.

It is seeking about $1 billion for the assets and the bids are expected to be in the $550-600 million range.

As per the given information, Coke, the world's largest beverages company, has already submitted a bid to buy out the European entity last week. If it emerges as the winner, it will be the Atlanta-based giant’s second big acquisition in India two decades after it bought Parle’s beverage brands, including Thums Up to make a return to India.