Tata Consumer competes with ITC to acquire majority stake in Organic India
Tata Consumer Products is expected to whiz past ITC in the race to acquire majority stake in Fabindia-backed Organic India, a firm which specializes in organic and ayurvedic health products. Tata Consumers and ITC are the only two major firms in a bid to acquire the state, reported Moneycontrol.
The discussion between Tata Consumer and Organic India are still progressing, while the Moneycontrol report states that the Tata company is leading in the bid war against ITC.
“Tata Consumer wants to focus on the health and organic products segment and Organic India fits in with their investment thesis. The talks between both the parties are at an advanced stage,” sources quoted by report said.
However, it is not yet confirmed if these discussions will lead to a transaction or not. The potential purchase of majority stock in Organic India pushes Tata Consumer Products’ agenda on making an impact in the organic product industry.
Tata Consumers can majorly upscale the business of Organic India through its strength in distribution and supply chain, while the business is non-core for Fabindia, which is aiming to unlock its full potential.
Currently, Fabindia holds 64 per cent stake in Organic India, being the sole big investor in the firm. Further, 17 per cent is with the founder promoters, 15 per cent with Premji Invest and the rest is owned by employees and the ESPS trust.
Tata Consumer Products expanding its market
Earlier, Tata Consumer was in talks with bottled water brand Bisleri for an acquisition deal, which later dell through. However, Organic India and Bisleri are not the only retail segments where Tata is looking to expand.
Earlier, Tata Consumers was also in talks with the Haldiram Group for a potential deal. Apart from this, Tata is also in talks with private equity firm General Atlantic-backed Capital Foods, the parent company of the instant noodles and condiments brand Chings Secret, for an acquisition deal.
