Ruchi Soya Industries on Wednesday announced it will acquire Patanjali Ayurved’s food retail business for Rs 690 crore. The acquired food business comprises of 21 major products namely ghee, honey, spices, juices and atta, etc., the company informed in an exchange filing. “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 will also get the manufacturing plants located at Padartha, Haridwar, and Newasa, Maharashtra. The company said that the Patanjali Ayurved Ltd’s Board has also approved this transfer of food business to Ruchi Soya with an effective date of May 09.
The company informed that the business transfer will be carried out in three tranches. In the first tranche, Rs 103,50,00,000/- (Rupees One Hundred Three Crores Fifty Lakhs only) for 15 per cent of the total purchase consideration shall be simultaneously paid with the execution of the business transfer agreement or within three days from the execution of the business transfer agreement. In the next tranche, Rs 293,25,00,000/- (Rupees Two Hundred Ninety Three Crores Twenty Five Lakhs only) for 42.5 per cent of the total purchase consideration shall be paid on the closing date (defined under the business transfer agreement).In the final phase, Rs 293,25,00,000/- (Rupees Two Hundred Ninety Three Crores Twenty Five Lakhs only) for the remaining 42.5 per cent of the total purchase consideration shall be paid within 90 days from the closing date. The entire transaction is likely to be completed by July 15, 2022, the company statement said. “This strategic initiative for acquisition of food business shall strengthen its food product portfolio with array of brands and also contribute to the growth in terms of revenue and EBIDTA,” the FMCG firm said. Ruchi Soya said that its board has decided to change the name of company from “ Ruchi Soya Industries Limited" to “Patanjali Foods Limited" subject to statutory and regulatory approvals. Shares of Ruchi Soya were up 3% at ₹1,116 in afternoon trade. "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.