Tata Group's consumer products unit, Tata Consumer Products, recently said it will be acquiring a 100% stake in Capital Foods, a company known for ‘Ching’s Secret’ and ‘Smith & Jones’.
Tata said the acquisition will occur in phases, with 75% of the equity shareholding being acquired immediately and the remaining 25% over the next three years. The acquisition is aimed at broadening Tata Consumer’s product range and target market in high-margin categories, the release notes.
Capital Foods' market presence
Capital Foods, a leader in Desi Chinese products and growing in Western cuisine, holds top positions in five major categories. Tata believes the acquisition will significantly enhance Tata Consumer Products' portfolio and strengthen its pantry platform.
It also promises substantial synergy benefits in distribution, logistics, exports, and overheads. The market size for Capital Foods' categories is estimated at Rs 21,400 crores, driven by income growth, evolving consumer preferences, and a demand for convenience.
What does the leadership say about the acquisition?
Sunil D’Souza, MD & CEO, Tata Consumer Products said, “It will open up significant market opportunities in the fast-growing non-Indian cuisines segment, leveraging the sales and distribution platform that we have built. The strong brand recall of Ching’s Secret and Smith & Jones coupled with our operational strength across channels makes us extremely confident of driving topline growth and realizing cost synergies. This transaction will accelerate momentum in our business and is margin accretive to our business.”
Ajay Gupta, Founder of Capital Foods said, "Together, Tata and Capital Foods can create a multi-national culinary brand that includes multiple food categories. The journey ahead is going to be a giant leap for us, full of endless possibilities and definitely exhilarating!”
Kotak Investment Banking and Khaitan & Co served as exclusive financial and legal advisors to Tata Consumer Products Limited (TCPL) for this transaction, ensuring a smooth and strategic acquisition process, it added.
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