Zydus Cadila outbids Coca-Cola in race to acquire Kraft Heinz brands in India

The Kraft logo is pictured outside its headquarters in Northfield, Illinois, March 25, 2015. REUTERS/Jim Young/File Photo GLOBAL BUSINESS WEEK AHEAD PACKAGE - SEARCH 'BUSINESS WEEK AHEAD MAY 2' FOR ALL IMAGES - GF10000398504

Zydus Cadila Group has emerged as the frontrunner to acquire Kraft Heinz Company's consumer brand business by making a Rs 4,500-crore offer. With the move, the Ahmedabad-based company has overtaken Coca-Cola Company that was in the race to acquire the American food company's India operations, The Economic Times reported citing sources.

Coca-Cola and Zydus Cadila are in the running to acquire Kraft’s portfolio that includes products such as children's health drink Complan, Nycil talcum powder and energy drink powder Glucon D.

Officials familiar with the development were quoted as saying that the deal would close within a month.

As per the report, Cadila Group is working with investment bank Avendus and has made a conditional bid. If it goes through, the company would rope in a private equity partner for funding. The report suggests that it has already sent proposals to PE groups True North, Temasek, Warburg Pincus and Carlyle, and may place its equity in a back-to-back deal.

Besides Coca-Cola and Cadila, a private consortium of Apax and Arpwood Partners emerged as a surprise bidder in the final round, until Kraft Heinz tweaked the deal.

Initially, Kraft Heinz planned to sell its India operations along with the brands. However, it later decided to sell the European holding company, registered in Italy, that houses India operations and wanted the buyer to take over the tax liabilities of the entity.