Tata Consumer in Discussions to Acquire 51% Stake in Haldiram's: Report

Tata Consumer in Discussions to Acquire 51% Stake in Haldiram's

Tata Consumer in Discussions to Acquire 51% Stake in Haldiram's

October 01, 2023
The consumer unit of Tata Group is currently in negotiations to secure a majority stake of at least 51% in the renowned snack manufacturer, Haldiram's. However, there is a disagreement regarding the sought-after valuation of USD 10 billion, Reuters said in a report on September 6.

Haldiram's, a household name in India for its potato-based "bhujia" and other savory snacks, is exploring the possibility of selling a 10% stake, and they have reportedly engaged with private equity firms such as Bain Capital, according to sources cited in a news report by Reuters.

One source cited in the report has indicated that Tata is interested in acquiring more than 51% of the stake but has expressed concerns about the "high asking price" proposed by Haldiram's. Tata Consumer Products Ltd, which possesses brands like UK-based Tetley and maintains a partnership with Starbucks in India, is actively engaged in these discussions for stake acquisition.

This potential acquisition presents a promising opportunity for Tata, as it would allow them to diversify beyond their reputation as a tea company. If this deal materializes, it would position the Indian conglomerate to directly compete with industry giants like Pepsi and billionaire Mukesh Ambani's Reliance Retail.

The news report about the discussions between Tata Consumer and Haldiram’s on potential acquisition of the later made the capital market regulators send emails to Tata Consumer seeking clarification.

Tata Consumer:
"The Company will make appropriate announcements in compliance with the obligations under SEBI (LODR) Regulations, 2015, as and when any such requirement arises," as reported to BSE and NSE."

"The Company is not in negotiations as reported in the above-referred news article. They are not aware of any information that has not been announced to the Exchanges, which requires disclosures under Regulation 30 of the SEBI (LODR) Regulations, 2015."
There is no impact of this article on the Company. They would like to add that the Company evaluates various strategic opportunities for growth and expansion of the business of the Company, on an ongoing basis.

Haldiram's, a family-run business with roots dating back to a small shop established in 1937, is renowned for its popular "bhujia" snack, which is available for as little as Rs 10 (USD 0.12) at local stores. It also has Haldiram’s Potato Chips in several flavors in the market.

The company commands nearly 13% of India's USD 6.2 billion savory snack market, according to Euromonitor International, a market share that is on par with Pepsi, famous for its Lay's chips., also has around 13%.

Haldiram's snacks are distributed in overseas markets such as Singapore and the United States, and the company operates approximately 150 restaurants offering a diverse menu of local and western cuisine. The proposed USD 10 billion valuation for Haldiram's corresponds to a multiple of 6.6 times its annual revenue, which stands at USD 1.5 billion, as reported by Reuters.