Norwegian conglomerate Orkla has entered into an agreement to acquire 67.8% of the shares in Kerala- based Eastern Condiments, which sells spices, masala blends, rice powders, coffee, tea and pickles, Eastern said on Friday. Through its wholly owned subsidiary MTR Foods, Orkla, has signed agreements to purchase a 41.8 % ownership stake in Eastern from members of the Meeran family and to acquire the entire ownership stake held by McCormick Ingredients SE Asia, which will give Orkla a 67.8 % ownership stake after completion of the transactions.
The Meeran family that runs leading spices maker Eastern Condiments has agreed to sell its majority stake to Norwegian packaged food major Orkla for over Rs 1,350 crore, the family said in a statement.
Under the agreement, the Meeran brothers – Firoz and Navas Meeran – who owned 74 per cent in the company, will sell 41.8 per cent to Orkla, which owns the famous MTR brand under Foods.
Later, when Eastern is merged with MTR, the Meerans will exit Eastern by selling their remaining 32.2 per cent and in return will get 9.99 percent of the merged entity, the statement said. The deal completion or merger is expected to be over in 15 months.
The domestic spices industry is around Rs 22,000 crore and has been annually clipping at 13 per cent over the past eight years ended March 2020.
After the deal, Eastern will be merged with MTR, and Orkla hopes to double its sales in the country with the Eastern deal. MTR under Orkla has grown five-times since 2007.
Eastern has seven production facilities in four states and employs around 2,955 people.
Orkla is a leading supplier of branded consumer goods and concept solutions to the consumer, out-of-home and bakery markets in the Nordics, Baltics and selected markets in central Europe and India.
The acquisition expands Orkla”s already strong presence in the country”s food and spices segment through MTR Foods, which it had acquired in 2007 and is a fully-owned subsidiary now. With this move, Orkla hopes to double its sales in the country. Navas Meeran, chairman of Eastern, said, “Orkla is known for its strong, local brands and holds leadership positions across multiple FMCG categories in several markets. Together with MTR, and as part of Orkla, we will have a stronger platform for our successful operations.”