Jan 22, 2019
Another major M&A is taking place in Indian food industry with French dairy group Lactalis signing agreement to buy the milk-processing business of Maharashtra-based Prabhat Dairy for about Rs 1,700 crore through a slump sale.
Tirumala Milk Products, the local arm of Lactalis’ will acquire Prabhat’s dairy business as well as its step-down subsidiary Sunfresh Agro Industries through a share purchase agreement.
In fact this association with Lactalis with Prabhat Dairy will offer this business a strong platform for accelerated growth momentum in becoming one of the largest private dairy businesses in India. The acquisition will help Lactalis reduce its dependence on home markets within Europe, where it gets the bulk of its revenue.
Family-run Lactalis, owner of the Galbani, Lactel and President brands, is the second-largest food company in France, behind Danone.
In 2014, the French giant had purchased Hyderabad-based Tirumala, the second-largest dairy company in south India, for Rs. 1,750 crore.
Prabhat, incorporated in 1998, has an aggregate milk processing capacity of 1.5 million litres per day and annual revenue of Rs. 1,554 crore. After the deal, Prabhat will focus on its cattle feed business and expand into allied businesses such as animal nutrition and animal genetics.
Earlier this month, it partnered with Denmark-based animal nutrition major DLG.