Oslo-based Orkla Foods owns a 67.8% stake in leading spice condiment-curry powder-food company Eastern Condiments. The Rs 1,356 crore deal will be done through MTR, a leading Indian food company wholly owned by Orkla. It also aims to merge Eastern into MTR.
The Meeran family, the founders of Eastern, has a 74% stake in the company and 26% of the stake belongs to the U.S based company called McCormick. Orkla will buy a 41.8% stake in the Meeran family (Rs 836 crore) and a 26% stake in McCormick Ingredients (Rs 520 crore) for a total value of Rs 2,000 crore. After the completion of this transaction, it will move towards the merger of MTR and Eastern. Orkla will have a 90.01% stake in the company, which will be merged with MTR & Eastern, while Nawaz Meeran and Feroz Meeran brothers will have a 9.99% stake. Orkla says India’s turnover will double with the acquisition of Eastern.
MTR Founded in 1924 with its headquarters in Bangalore, has been owned by Orkla since 2007. It has markets in 32 countries, Factories in Bangalore and Pune, and have employees of 1018.MTR has only vegetarian when it comes to Eastern, they are offering Veg – Non-Veg products. The acquisition and merger will take at least one and a half years to complete. Navas Meeran, owner of Eastern Condiments said that the partnership with Orkla will help them to enter into more markets and bring more products to the market. It will help the company to expand its business to the European market as well. Now with this deal, Orkla’s international products can be manufactured in India and marketed.
Eastern Condiments was started in 1983 as part of the growth of the grocery business started by ME Meeran in 1968 in Adimali. The Kochi Edappally-based company currently has a turnover of Rs 900 crore. The average annual growth rate is 8%. Half of the turnover comes from Kerala and the rest from other states and abroad. There are 7 manufacturing centers in 4 states and having Employees of 2955. McCormick bought a 26% stake in 2010 for $ 3.5 million in Eastern, a leading exporter of spices.