Ruchi Soya has agreed to acquire Patanjali Ayurved Limited (PAL)’s food retail business. Under the deal, Ruchi Soya gets the entitlement of manufacturing, packaging, labeling, and retail trading of specific food products. Not only this, Ruchi Soya will get the possession of manufacturing plants located at Padartha, Haridwar, and Newasa, Maharashtra.
“This strategic initiative for acquisition of food business shall strengthen its food product portfolio with an array of brands and also contribute to the growth in terms of revenue and EBIDTA,” the FMCG firm said.
The agreement is subject to the approval of shareholders and other authorities.
On a slump sale basis, the transaction is valued at Rs 690 crore, with an estimated completion date of July 15, 2022. Following the acquisition, the name of Ruchi Soya would be changed to Patanjali Foods.
“The acquisition is valued at a Fair Market value (Net) of Rs 690 crore based on all the fixed assets of Food division & respective current assets on slump sale basis,” the company statement said.
Ruchi Soya said its board has come to a consensus to change the name of the company from “ Ruchi Soya Industries Limited” to “Patanjali Foods Limited”, which will be subject to statutory and regulatory approvals.
“The transaction shall consist of transfer of employees, assets (excluding Patanjali’s brand, trademarks, designs, and copyrights), current assets (excluding debtors, vehicles, cash, and bank balance) contracts, licenses and permits, distribution network, customers related to the Food Retail Business Undertaking of Patanjali Ayurved,” the company informed in an exchange filing on Wednesday.
In 2019, Baba Ramdev’s company–Patanjali bought Ruchi Soya via an insolvency process.
On the application of Standard Chartered Bank and DBS Bank, the National Company Law Tribunal (NCLT) ordered the initiation of bankruptcy proceedings against Ruchi Soya in December 2017.
To fulfill market regulator Sebi’s minimum public ownership rule of 25% in a listed business, the edible oil giant issued a follow-on public offer (FPO) in April this year.