ITC on Saturday, 23 May 2020, entered into a share purchase agreement (SPA) to acquire 100% stake of Sunrise Foods (SFPL), which is engaged in the business of spices under the trademark 'Sunrise'.
The transaction is subject to fulfillment of various terms and conditions as specified in the Share Purchase Agreement (SPA). The proposed acquisition is aligned with ITC's strategy to rapidly scale up its FMCG businesses in a profitable manner, leveraging its institutional strengths viz. deep consumer insight, a deep and wide distribution network, agri-commodity sourcing expertise, cuisine knowledge, strong rural linkages and packaging know-how.Sunrise is a clear market leader in eastern India in the fast-growing Spices category with a rich heritage and brand legacy of over 70 years. Over the years, the brand has built a loyal consumer franchise, anchored on a differentiated product portfolio tailored to regional tastes and preferences, both in the basic and blended spice segments.
The proposed acquisition of Sunrise will augment ITC's product portfolio and significantly scale up its spices business expanding its footprint across the country. The consumer connect and distribution network of SFPL in the focus markets, along with the sourcing and supply chain capabilities of the company's agri business arm and its pan-India distribution network, will provide significant value creation opportunities for ITC.
The proposed transaction is also in line with ITC's philosophy of enhancing the competitiveness of agri value chains in India whilst making a meaningful contribution to enhancing farmer incomes. Finalisation of the SPA along with related processes were completed during lockdown conditions, reflecting the company's agility and resilience in dealing with the new normal.
The announcement was made on Sunday, 24 May 2020. The markets are closed today, 25 May 2020 on account of Ramzan Id or Eid-ul-Fitar.
ITC's consolidated net profit jumped 29% to Rs 4,047.87 crore on a 5.7% rise in net sales to Rs 13,220.30 crore in Q3 December 2019 over Q3 December 2018.
ITC is engaged in the marketing of fast-moving consumer goods (FMGC). The firm operates through four segments: FMCG; hotels; paperboards, paper and packaging, and agri business. ITC is the market leader in cigarettes in India. ITC's wide range of brands, includes Insignia, India Kings, Classic, Gold Flake, American Club, Navy Cut, Players, Scissors, Capstan, Berkeley, Bristol, Flake, Silk Cut, Duke & Royal.
The company also has presence in branded packaged foods, personal care, education and stationery, agarbattis & safety matches, lifestyle retailing, hotels, paperboards & specialty papers, packaging, agri-business & IT.
Shares of ITC fell 1.35% to close at Rs 186.35 on BSE on Friday, 22 May 2020. The scrip advanced 3.52% in the past one month till Friday, outperforming the Nifty FMCG index's 2.97% fall in the same period.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
