Tatas acquire 81 percent in Amalgam Foods

By SiliconIndia   |   Thursday, 28 December 2006, 06:00 Hrs
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BANGALORE/ NEW DELHI: In a totally unanticipated move, the Tata group has made its foray into the foods business, with the acquisition of 80.62 percent stake in Kochi-based Amalgam Foods & Beverages. Though the Tatas have been looking at the foods business - especially the convenience foods segment – for quite some time, and had recently entered the fray for acquiring Bangalore-based MTR Foods, this move came as a surprise to most industry watchers. The acquisition was through one of the associate entities of its group company Indian Hotels (IHCL). The Economic Times reported this today. A Tata group spokesperson was said to have confirmed the acquisition.

While the specific details of the transaction are not yet known, sources indicated that Amalgam’s below Rs 100-crore domestic food business could attract a valuation of Rs 100-150 crore. The Amalgam group, which started off with an export-oriented sea food business, has five companies in its fold, operating 14 factories along the coast with over 4,000 employees.

Part of the Rs 250-crore seafood exporter Amalgam group, the target company has a portfolio of frozen, ready-to-fry and ready-to-cook offerings under the Sumeru brand. It is currently retailed through 2,000 outlets across the country and will be launching ready-to-heat-and-serve gourmet foods shortly.

Amalgam has been exploring the market for investors to fuel its expansion plans. Earlier, its plans for a 50:50 joint venture with the UK-based $50-million Patak had fallen through.

Sources close to ET told the publication that said Sheela Nair, a top honcho of Roots Corporation that runs Ginger budget hotels, and currently the head for new business projects is involved in the latest acquisition. It is also being believed that the Tatas are looking at making more acquisitions in the niche foods space, which is expected to boom on the back of the organized retail expansion.

Amalgam has in the past attracted financial participation from global players such as Nissin Foods, Itochu Corporation, Mitsubishi Corporation and Ristic of Germany in setting up some of its plants.

The group sold its cooked shrimp business to Hindustan Lever recently, and also offloaded most of its strategic shareholding in Bangalore-based cold chain logistics company Snowman, in which Mitsubishi and HLL were also shareholders.

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