Norway’s Orkla acquires majority stake in Kochi-based Eastern Condiments

By: |
September 5, 2020 3:00 AM

Established in 1983 by ME Meeran, Eastern has seven production facilities in four states in India and employs 2,955 people.

Orkla is listed on the Oslo Stock Exchange and its headquarters is in Oslo.Orkla is listed on the Oslo Stock Exchange and its headquarters is in Oslo.

Norwegian conglomerate Orkla has entered into an agreement to acquire 67.8% of the shares in Kerala- based Eastern Condiments, which sells spices, masala blends, rice powders, coffee, tea and pickles, Eastern said on Friday.

The deal values Eastern on a cash-and-debt-free basis at Rs 2,000 crore, sources said and added that there is a possibility of Orkla obtaining full ownership over time.

Orkla, through its wholly owned subsidiary MTR Foods has signed agreements to purchase a 41.8 % ownership stake in Eastern from members of the Meeran family and to acquire the entire ownership stake held by McCormick Ingredients SE Asia, which will give Orkla a 67.8 % ownership stake after completion of the transactions.

Eastern sources said that the valuation of Eastern in the deal is Rs 2,000 crore and the company had a total turnover of Rs 850 crore in the last twelve months ending June 30,2020.

Eastern is currently owned by the Meeran family (74 %) and McCormick (26 %).

Established in 1983 by ME Meeran, Eastern has seven production facilities in four states in India and employs 2,955 people.

Orkla is a leading supplier of branded consumer goods and concept solutions to the consumer, out-of-home and bakery markets in the Nordics, Baltics and selected markets in Central Europe and India. Orkla is listed on the Oslo Stock Exchange and its headquarters is in Oslo.

Following completion of the transactions, a merger application will be filed with the intention of merging Eastern into Orkla’s wholly owned subsidiary MTR. The merged company will be jointly owned by Orkla and the two brothers Firoz and Navas Meeran.

“Orkla is known for its strong local brands and holds leadership positions across multiple FMCG categories in several markets. Orkla has a solid track record of building leading food brands based on a strong organisational culture and company values. Together with MTR, and as part of Orkla, we will have a stronger platform for our successful operations,” says Navas Meeran, Chairman of Eastern.

Eastern offers a mix of non-vegetarian and vegetarian food products largely in the categories of blended and single spices. MTR has, and will continue to have, a purely vegetarian product range in spices and packaged foods. Together, the companies will have an even stronger offering to the Indian consumer.

“This announcement marks a significant step for Orkla towards delivering on its strategy to strengthen our footprint in our core geographies. By joining forces, Eastern and MTR will create a solid platform in the fast-growing Indian market, based on strong local brands. MTR has been a great success story for Orkla. Now we look forward to continuing the journey with the Meeran brothers as partners”, says Orkla president & CEO Jaan Ivar Semlitsch.

“Eastern and MTR have a strong combined portfolio of complementary products, an attractive geographical presence and good export potential. The Indian branded food and spice markets are growing by double digits, and we see positive long-term demand dynamics with increasing purchasing power and more urban lifestyles. We are looking forward to this new partnership. This will definitely strengthen Orkla’s position in India,” says Sanjay Sharma, CEO of MTR.

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