Agro Tech Foods, which owns brands such as ACT II popcorn and Sundrop, announced the acquisition of Del Monte Foods from Bharti Enterprises through a share swap deal.
The board of Agro Tech Foods in a meeting held on Thursday approved the acquisition and also approved the proposal for change of name of the company from “Agro Tech Foods Ltd” to “Sundrop Brands Limited”, Agro Tech Foods said in a regulatory filing.
“We are thrilled to welcome Del Monte Foods into the Sundrop Brands family. This partnership aligns perfectly with our enhanced vision of bringing joyful food experiences to the modern consumer,” Agro Tech Foods CEO and Executive Director Asheesh Kumar Sharma said.
As per the deal, Agro Tech Foods will issue 1.33 crore equity shares of the company to Bharti Enterprises, making it the second largest shareholder.
Agro Tech Foods will issue up to 1.33 crore shares at a face value of Rs 10 each fully paid-up, at a price of Rs 975.5 per equity share, which includes a premium of Rs 965.5 per equity share.
This will relate to “Rs 1,300.11 crore for acquisition of 100 per cent of the issued equity share capital in Del Monte Foods Pvt Ltd (DMFPL) discharged by way of consideration,” according to a regulatory filing.
DMFPL, is a joint venture between Bharti Enterprises, owning 59.29 per cent stake and the remaining 40.71 per cent by DMPL India, which is a step-down unit of Del Monte Pacific.
With this transaction, both Bharti Enterprises and DMPL will receive shares of Agro Tech Foods as consideration and will become public shareholders of ATFL post the transaction.
Additionally, Agro Tech Foods (through DMFPL) will acquire an exclusive, perpetual license for the Del Monte brand in India, it said.
The acquisition is in line with Agro Tech Foods’ strategic intent of creating a diversified processed food portfolio across various categories and segments and building a sustainable, diversified and profitable business, the filing added.
“Bharti is excited to announce the combination of ATFL and DMFPL, making Bharti the second largest shareholder in the combined platform,” said Harjeet Kohli, Joint Managing Director of Bharti Enterprises.
Bharti Enterprises is one of India’s leading business groups with interests in telecom, space communications, digital infrastructure, financial services, real estate, hospitality, agri-processed foods, and manufacturing.
DMFPL’s turnover for FY 23-24 was at Rs 546.68 crore. It is engaged in selling branded processed food products including ketchups, emulsions and olive oils in India and some foreign markets in the Middle East and South-East Asia.
As part of this transaction, Agro Tech Foods will also gain access to Del Monte’s manufacturing and R&D facility in Hosur, Tamil Nadu and in Ludhiana, Punjab, which will play a key role in supporting its expansion and the development of new product lines tailored to Indian consumers.
“The strategic transaction is expected to further enhance Agro Tech Foods’ presence across retail and food services sectors, expanding its reach to traditional retail, modern retail, quick-service restaurants and food services customers,” it said.
Though the deal is subject to regulatory clearances, Agro Tech Foods expects it to be completed within nine months.
The completion of this acquisition is contingent upon the fulfillment of various terms and conditions specified in the transaction documents including approval of the Competition Commission of India.
Pursuant to the completion of the proposed acquisition, DMFPL will become a wholly-owned subsidiary of Agro Tech Foods.
Moreover, Agro Tech Foods also announced a new leadership for the expanded platform, by appointing Nitish Bajaj as Group Managing Director of the company.
PTI
