Adani Enterprises Board Approves Demerger of Food and FMCG Businesses
Adani Enterprises Limited (AEL), the flagship company of the Adani Group, has announced that its board has approved the demerger of its food and fast-moving consumer goods (FMCG) businesses. These verticals will merge into Adani Wilmar, a joint venture between the Adani Group and Singapore-based Wilmar Group.
The demerger will result in a reduction of the promoter stake in Adani Wilmar, in compliance with Securities and Exchange Board of India (Sebi) guidelines. Currently, AEL holds a 43.94% stake in Adani Wilmar through Adani Commodities. This stake will be transferred to existing public shareholders of Adani Wilmar. Under the scheme of arrangement, AEL shareholders will receive 251 shares of Adani Wilmar for every 500 shares held. The record date for the transaction is yet to be announced.
AEL's incubation strategy includes demerging businesses once they become self-sustaining and properly established. In the past, AEL has demerged businesses such as Adani Green Energy and Adani Energy Solutions (formerly Adani Transmission).
Following the transaction, the promoter stake in Adani Wilmar will decrease from 87.87% to 76.76%, while public shareholding will rise from 12.13% to 23.24%. Sebi guidelines mandate that large firms must have at least 25% of their shares available to the public within three years of listing. Adani Wilmar, listed in February 2022, has until February next year to comply.
Additionally, Adani Wilmar will cease to be a joint venture of the Adani Group after the demerger. The food and FMCG verticals of Adani Enterprises are expected to attract a diverse set of investors, strategic partners, lenders, and other stakeholders. The demerger aims to provide greater focus on the operation of the food and FMCG businesses and reorganize and segregate these businesses into Adani Wilmar.
Adani Enterprises stated that the proposed demerger would unlock direct value for its shareholders and provide opportunities for independent collaboration and expansion.
This strategic move is expected to align with the Adani Group's long-term goals, enhancing the operational focus and growth potential of its food and FMCG businesses while meeting regulatory requirements. The transaction is seen as a step towards optimizing the group's business structure and enhancing shareholder value.
