New Delhi, Oct 16: Cash-strapped Uncle Chipps Company Ltd on Monday ratified the proposed acquisition of the popular potato chips brand Uncle Chipps by PepsiCo's snack food division Frito-Lay India.
According to joint press release issued here, the two companies have entered into a `strategic alliance' for potato chips business. The `alliance' was ratified by the shareholders of Uncle Chipps Company Ltd at its EGM held, on Monday, at Noida. Uncle Chipps Company Ltd managing director Vikram Bajaj, who refused to give out the consideration of the deal, said: ``We have been looking for an appropriate opportunity to exit the highly agri-dependent and highly taxed potato chips business for some time so as to be able to concentrate on our core businesses including namkeens and extruded snacks.
We, therefore, approached Frito-Lay as we felt that forging an alliance with the largest snack food company in the world, which has a strong agro programme creates a win-win situation for us.''
As a consequence of the proposed takeover of the Uncle Chipps brand by Frito-Lay, the Uncle Chipps Company Ltd will be renamed Amrit Agro Industries. Also, as per the agreement, Frito-Lay will buy the manufacturing machinery from Uncle Chipps' manufacturing plant lying idle at Silvassa.Amrit Agro, will however, continue to co-pack the Uncle Chipps brand of chips for Frito-Lay at their other unit at Noida near Delhi. It will also continue to manufacture and market Yumkeenz, its namkeen brand and Rompa Chompa, the extruded snack food brand. The acquisition of the Uncle Chipps brand will take Frito-Lay's market share in the branded potato chips market up from 50 per cent to 85 per cent.
Frito-Lay with a turnover of Rs 125 crore, is growing at 20-25 per cent against an industry average of eight per cent.
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