Hindustan Unilever (HUL) on Monday announced it has signed an agreement with Vijaykant Dairy and Food Products (VDFPL) and its group company.
Hindustan Unilever (HUL) on Monday announced it has signed an agreement with Vijaykant Dairy and Food Products (VDFPL) and its group company to acquire its ice cream and frozen desserts business consisting of its brand Adityaa Milk and its front-end distribution network.
Although the company has not yet disclosed the transaction amount, it stated in a release that VDFPL will manage the business until the transaction is completed and will continue to manufacture for HUL for an agreed period of time.
HUL also stated that the proposed acquisition is in line with the company’s strategic intent to strengthen its position in the growing ice cream and frozen dessert market in the country.
Adityaa Milk is a flagship business of VDFPL, which was incorporated in September 2004. It has a presence in dairy and dairy-based products and over the past five years it has expanded into ice creams and frozen desserts. The company has its roots in Karnataka and has gradually expanded into Maharashtra, Goa and Kerala. “Post the acquisition of its ice cream and frozen desserts business by HUL, VDFPL will continue to pursue its dairy business,” HUL stated in the release.
HUL markets ice creams and frozen desserts under the Kwality Wall’s and Magnum brands in India. In the first quarter of fiscal 2019 (Q1FY19), HUL’s foods and refreshment segment revenues had witnessed a 14% volume growth led by strong growth in tea and ice cream & frozen desserts.
Sanjiv Mehta, chairman and managing director of HUL, stated in the release that the company sees great potential for growth in the ice creams and frozen desserts segment. “We believe the acquisition will complement our existing portfolio of Kwality Wall’s,” he said.