Heinz India is a subsidiary of American food company Kraft Heinz and has a portfolio of brands that includes Complan, Glucon D, Nycil and Sampriti Ghee
Zydus Wellness said on October 24 it will jointly acquire Heinz India with Cadila Healthcare for Rs 4,595 crore, according to a disclosure made to the exchanges.
Heinz India is a subsidiary of American food company Kraft Heinz and has a portfolio of brands that includes Complan, Glucon D, Nycil and Sampriti Ghee.The company has a network of over 800 distributors, and more than 20,000
wholesalers across 29 Indian states.
Zydus Wellness said the acquisition will result in its own annual turnover increasing to around Rs 1,700 crore and that it will be earnings per share (EPS) accretive.
Complan, along with GlaxoSmithKline's health drinks brands Horlicks, was very popular until about a decade ago, when consumers used these products for supplemental nutrition along with milk.
Their popularity has since waned, with sales growth slipping, as consumers grew wary of the sugar content in these products and the health claims made by these brands.
"The sale of this niche business fits into our overall global growth strategy and our focus on investing in and growing brands within our core categories," Kraft Heinz Chief Executive Bernardo Hees said in a statement.
Kraft Heinz, which will also sell two manufacturing facilities as part of the deal, said it will continue to grow its Heinz sauces and other Kraft businesses in India.
The deal value includes net working capital of Rs 40 crore and cash of Rs 15 crore, but does not assume any debt, Zydus said in a statement. The deal will give Zydus a chance to leverage its position in the health-food and nutrition segment.
Zydus will finance the deal through a mix of equity and debt and plans to close it in the fourth quarter of the current fiscal year.(With Reuters inputs)