FMCG Hindustan Unilever (HUL) today said it has signed an agreement with LT Foods for sale of its rice exports business for a consideration of Rs 25 crore as it looks to exit non-core businesses.
"...It (HUL) has signed an agreement for the sale of its rice exports business carried out primarily under the brands 'Gold Seal Indus Valley' and 'Rozana', to LT Foods Middle East DMCC, a group company of LT Foods Limited (owner of 'Daawat')," the company said in a filing to the BSE.
HUL said the deal envisages transfer of the brands and inventory for a consideration of Rs 25 crore, subject to adjustments on closing.
"HUL's decision to divest is in line with its strategy to exit non-core businesses, while continuing to drive its growth agenda in the core packaged foods business," it added.
The transaction is subject to fulfillment of certain conditions and the parties will work together to complete this over the next few months. HUL will continue to manage the business until the completion of the transaction.
"The brands enjoy strong equity... Given the context of our portfolio priorities, we believe that it is in the best interest of the business to sell these brands to a strategic player such as LT Foods, who is capable and well positioned to unlock their full potential," Sanjiv Mehta, CEO and Managing Director of HUL, said.
The brands registered a turnover of Rs 51 crore as per audited financials for the year 2014-15.
HUL began exporting premium Basmati rice in 1985 under the brand 'Gold Seal Indus Valley' to various countries in the Middle East and Europe, which was subsequently extended to other brands and geographies.
