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Tata Consumer Products Ltd (TCPL) will soon acquire Organic India, backed by Fabindia, and Capital Foods, the maker of products under the brand name Ching's Secret, the Economic Times (ET) reported on Friday, citing people aware of the development.
The announcement is expected to be made next week.
TCPL will acquire the controlling stake in Organic India from Fabindia at a valuation of Rs 1,800 crore. It will buy a 75 per cent stake in Capital Foods from Invus Group and General Atlantic at a valuation of Rs 5,100 crore. The remaining 25 per cent stake will stay with former chairman of Capital Foods Ajay Gupta for now but TCPL will buy that stake too in future.
Organic India is known for its teas, infusions, herbal supplements and personal care items. Capital Foods, on the other hand, is known for instant noodles, soups and condiments under the brand names Ching's Secret and Smith & Jones.
Currently, TCPL sells teas, salt, and water bottles and has a joint venture with Starbucks Coffee in India. The acquisitions are expected to help the company directly compete with Nestle's Maggi, which currently leads the instant noodles market in India with a 60 per cent share. Other players in the category are Wai Wai, Top Ramen and Patanjali.
Last month, TCPL's chief executive officer (CEO) Sunil D'Souza told the Financial Times (FT) that the company is looking to acquire a brand with a global reach. The acquisition of Capital Foods and Organic India seems to be in line with that. Both of the brands have global markets.
Moreover, the acquisition of Organic India is expected to help the company in widening its product categories.
