Agro Tech Foods, supported by private equity firm Samara Capital, is set to acquire Del Monte Foods Pvt Ltd—a joint venture between Bharti Enterprises and Del Monte Pacific—in a transaction valuing the company at over Rs 1,300 crore. This acquisition will be structured as a preferential share allotment, enabling Agro Tech to issue 1.33 crore shares at Rs 975.5 each to Bharti Enterprises and Del Monte Pacific, allowing them to fully acquire Del Monte Foods without a cash payment.
Following the news, Agro Tech shares were trading down by 1.5% at Rs 1,020.7 on the NSE. Despite today’s decline, the stock has climbed 28% in the past year, placing the company’s market cap at Rs 2,500 crore.
This marks Bharti’s exit from the food business as the conglomerate, with core interests in telecom and broadband focuses on its core operations under the Airtel brand. The food journey for Bharti began way back in 2004 when it allied with the global investor E.L. Rothschild to form FieldFresh Foods that started operations with fresh produce. Then again, in 2007, Del Monte Pacific entered the venture by investing in a stake in the company and expanded the product portfolio in the packaged foods space with juices, sauces, and olive oils.
This acquisition is seen by Agro Tech as a strategic opportunity to expand its lineup on processed foods. Agro Tech operates a portfolio of popular brands like Sundrop and Act II, while Del Monte products will be used through retail and institutional channels like restaurants and airlines.
The deal concludes in nine months, pending approval by shareholders and the Competition Commission of India. In concert, Agro Tech also announced it would be renaming itself “Sundrop Brands Ltd” as it zeroes in on the consumer-branded packaged foods business.
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Source: Moneycontrol
News Desk
