ITC to acquire spice manufacturer Sunrise Foods; to augment product portfolio, boost FMCG revenue by 7%

ITC Ltd has entered into a share purchase agreement (SPA) to acquire 100 percent of the equity share capital of Sunrise Foods Private Limited

FP Staff May 25, 2020 14:35:18 IST
ITC to acquire spice manufacturer Sunrise Foods; to augment product portfolio, boost FMCG revenue by 7%

ITC, the consumer goods giant, is going to acquire spices maker Sunrise Foods Private Limited, the company said in a statement to stock exchanges on Sunday.

While the company did not disclose the value of the deal, sources said it is valued around Rs 1,800 crore to Rs 2,000 crore.

ITC to acquire spice manufacturer Sunrise Foods to augment product portfolio boost FMCG revenue by 7

Pic courtesy: CNBC-TV18

"Sunrise is a clear market leader in eastern India in the fast-growing spices category with a rich heritage and brand legacy of over 70 years," ITC said in a statement.

Over the years, the brand has built a loyal consumer franchise, anchored on a differentiated product portfolio tailored to regional tastes and preferences, both in the basic and blended spice segments, it added.

"The proposed acquisition is aligned with ITC's strategy to rapidly scale up its FMCG businesses in a profitable manner...," it said.

ITC Ltd has entered into a share purchase agreement (SPA) to acquire 100 percent of the equity share capital of Sunrise Foods Private Limited (SFPL), a company primarily engaged in the business of spices under the trademark “Sunrise”, the Kolkata-based company said.

In a regulatory filing, ITC said that the proposed acquisition will augment its product portfolio and is aligned to the company's aspiration to significantly scale up its spices business and expand its footprint across the country.

The size of the deal was not revealed.

"ITC Limited has entered into a Share Purchase Agreement (SPA) on 23 May, 2020 to acquire 100 percent of the equity share capital of Sunrise Foods Private Limited (SFPL), a company primarily engaged in the business of spices under the trademark 'Sunrise', subject to fulfilment of various terms and conditions as specified in the SPA," it said.

The deal will "augment the company''s product portfolio and is aligned to ITC's aspiration to significantly scale up its spices business and expand its footprint across the country", ITC said.

It also noted that ITC's Aashirvaad range of spices is already a market leader in Telangana and Andhra Pradesh.

"The deep consumer connect and distribution strength of SFPL in the focus markets, together with synergies arising out of the sourcing and supply chain capabilities of the company''s agribusiness and its pan-India distribution network, will provide significant value creation opportunities for the company, " it added.

ITC further said the proposed transaction is also in line with its "philosophy of enhancing the competitiveness of agri value chains in India whilst making a meaningful contribution to enhancing farmer incomes".

"Finalisation of the SPA along with related processes were completed during lockdown conditions, reflecting the company''s agility and resilience in dealing with the new normal," ITC said.

According to industry sources, JM Financial was the exclusive advisor to Sunrise.

--With inputs from agencies

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