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Groupe Lactalis to acquire Prabhat’s dairy business for Rs 1,700 crore
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Tuesday, 22 January, 2019, 12 : 00 PM [IST]
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Our Bureau, Mumbai
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Prabhat Dairy has entered into definitive agreements with Tirumala Milk Products Private Limited, a wholly-owned subsidiary of French dairy multinational Groupe Lactalis, for the sale of its dairy business for a consideration of Rs 1,700 crore.
The transaction involved the sale of the dairy business undertaking of Prabhat Dairy by way of a slump sale on a going concern basis, along with the sale of 100 per cent shareholding in Sunfresh Agro Industries Private Limited, a step-down subsidiary of Prabhat Dairy Limited, via a share purchase agreement.
Vivek Nirmal, joint managing director, Prabhat Dairy Limited, said, “We are pleased to announce this agreement with Lactalis. For the past 20 years, Prabhat has established itself as one of the most trusted dairy brands in the country.”
“We have built a world-class integrated milk and dairy products company, with a strong supply partnership with over 1,00,000 farmers, two state-of-the-art manufacturing facilities, cutting-edge technology and stringent quality standards,” he added.
“The association with Lactalis – one of world’s largest dairy players will offer this business a strong platform for accelerated growth momentum in becoming one of the largest private dairy businesses in India. I strongly believe that this partnership offers a promising future to our team members, partners and stakeholders,” Nirmal said.
Raviraj Vahadane, chief financial officer, Prabhat Dairy Limited, said, “The acquisition of the dairy business undertaking of Prabhat by Lactalis represents a meaningful opportunity for the employees of Prabhat to be associated with one of the global leaders in the dairy products business.”
The company intends to share a substantial portion of the proceeds from the sale with shareholders after meeting its tax and transaction cost obligations. After the closing of the transaction, Prabhat Dairy Limited intends to further develop its cattle feed business in various parts of the country, as well as expand into allied businesses, such as animal nutrition and animal genetics.
The acquisition is subject to customary conditions precedent, including approval from the Competition Commission of India, and other conditions precedent.
Vivek, Sarangdhar Ramchandra Nirmal and Nidhi Nirmal will continue to be associated with the business for the next two years.
Kotak Mahindra Capital Company acted as the exclusive financial advisor to Prabhat Dairy Limited, while Veritas Legal acted as its legal advisor.
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