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Hyderabad-based Heritage Foods has signed an agreement to purchase the dairy business of Reliance Retail through slump sale, the company has said.
According to a company statement, Reliance Retail will continue to trade in dairy products, including that of Heritage, through its retail and wholesale channels after the acquisition. Reliance Retail’s dairy procurement, processing and distribution business across the country is operated under two brands – Dairy Life and Dairy Pure.
The nine-year-old dairy platform of Reliance Retail offers a range of products including packed milk, flavoured milk, butter, ghee, curd, dairy whitener, sweets, and skimmed milk powder. It generated revenue of Rs 553 crore during the last financial year. It currently procures 225,000 litres of milk a day from 2,400 villages across 10 states.
According to the statement, the managements of both the companies believe that this acquisition will tap new opportunities in Punjab, Uttarakhand and Rajasthan, along with the existing states. The deal is subject to regulatory approvals.
Heritage Foods was founded by Andhra Pradesh Chief Minister N Chandrababu Naidu in 1992. It has five business divisions — dairy, retail, agri, bakery, and renewable energy. It has around 100,000 retails outlets across the country.
Heritage Foods’ revenues stood at Rs 641.3 crore in the quarter ended September 2016 against Rs 586.8 crore a year ago.
Earlier, Kishore Biyani-led Future Group was in talks to buy the retail business of Heritage Foods. But, both the groups have not finalised any business collaboration so far. The discussions are still exploratory in nature, according to the company’s clarification to the BSE.
