Orkla group buys MTR Foods for $80mn

Orkla ASA, the $8.8 billion Norwegian group with a strong presence in branded foods, has acquired MTR Foods, the Bangalore-based Rs 135 crore packaged foods company, for $80 million (Rs 353 crore) in an all-cash deal, a top MTR official said here on Tuesday.

An agreement to this effect was signed last Friday in Singapore between Sadananda Maiya, chairman and managing director of MTR Foods and Singapore-based Orkla Asia Pacific, a subsidiary of Orkla ASA of Norway. This brings to an end to the year-long speculation over the future of MTR.

Sadananda Maiya, who holds 40 per cent stake and his close relatives and friends who own another 19 per cent stake in the company, have agreed to sell their entire stake. The existing strategic investors in the company, JP Morgan and Aquarius who own 26 per cent and 15 per cent respectively are also exiting.

"The deal is satisfactory to the existing owners of MTR and mutually agreeable among all the investors," the official said. Post acquisition, Maiya will continue to head the Indian operations as chief executive officer and all its employees will be retained.

MTR Foods manufactures around 270 varieties of processed vegetarian food products, such as ready meals, ready mixes, spices and condiments. MTR is a quintessentially Indian brand which stood for quality, hygiene and authenticity. "A bit of India's family silver has been sold," a Bangalore oldtimer said.

JP Morgan Chase, which had invested Rs 19.2 crore for a 26 per cent stake in MTR in 2002, now stand s to walk out with Rs 91.8 crore, a nearly 500 per cent return in five years.

The deal, which is expected to be formalised in two months, is subject to regulatory approvals as one of the shareholders in MTR Foods who is selling the stake needs the approval of the Centre. Post acquisition, the name of the company will not be changed, the MTR official said.