Tata Consumer Products to acquire Tata SmartFoodz for Rs 395 cr

Tata Consumer Products Ltd (TCPL) on Friday announced to acquire Tata
SmartFoodz Limited (TSFL) from its group firm Tata Industries for a cash
consideration of Rs 395 crore.

TCPL has signed a definitive agreement to acquire 100 per cent equity
shares of TSFL, a deal which will help the Tata group FMCG arm to enter
into the Ready to Eat’ category, said a joint statement.

This move is consistent with TCPL’s strategic intent to expand into
value-added categories, it said, adding the acquisition will enable TCPL
to expand its product portfolio and enter the RTE segment .

TSFL, under the brand name Tata Q, offers a range of differentiated
products manufactured using MATS technology in India.

It had commenced operations in 2019 and became the second-largest player
in the RTE market. TSFL also has a manufacturing facility in Sri City,
Andhra Pradesh.

Tata Consumer Products to acquire Tata SmartFoodz for Rs 395 cr - The Financial Express

TCPL expects the RTE category to grow at a significant pace, benefitting
from demographic tailwinds such as urbanisation and high disposable
income nuclear families looking for convenience, nutrition and hygienic
food on the go.

The category is already large and growing strongly in the international
markets that TCPL already operates in. Tata Consumer Products will
leverage its existing domestic and international distribution and focus
on operational excellence to maximise value, said TCPL.

Moreover, TSFL is using MATS technology, which will also enable TCPL to
create a strong pipeline of value-added products in other parts of the
foods business.

Microwave-assisted thermal sterilisation (MATS) is a food processing
technology that uses long-wavelength microwave energy together with heat
to sterilise packaged food. It retains sensitive nutritional components,
along with flavour, texture and appearance.

TCPL MD and CEO Sunil D’Souza said: Tata SmartFoodz is a good strategic
fit for us given the nature of its business and it will also allow us to
expand our portfolio into the Ready to Eat segment. RTE is a
fast-growing segment in India and a sizeable opportunity in the
international markets .

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The acquisition will give TCPL access to unique technology and the
product portfolio synergizes well with its existing distribution
infrastructure both in India and internationally, he said.

We believe Tata Consumer Products is well-positioned to help unlock the
market potential of this technology and scale up this business to meet
the growing consumer need for wholesome, trusted and convenient food
offerings, D’Souza added.

Tata SmartFoodz CEO Balark Banarjea said: Being part of Tata Consumer
Products will enable us to strengthen our market presence and scale up
the business. It will allow us to leverage Tata Consumer’s strength in
modern trade and e-commerce channels in India and also its global
presence to target key international markets for RTE exports .

TCPL, earlier known as Tata Global Beverages Ltd, had earlier this year
in February had announced to acquire Bengaluru-based Kottaram Agro
Foods, engaged in the business of healthy breakfast cereals and
millet-based snacks under the trademark Soulfull, for Rs 155.8 crore to
expand its product portfolio.

Last month, the company had said it will transfer its tea cafe business
‘Tata Cha’ to group firm IHCL, which operates Taj group of hotels.

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TCPL is already operating Tata Starbucks, a 50:50 joint venture with
Starbucks Corporation, and operates around 224 stores in 18 cities.

TCPL was formed by merging the consumer products business of Tata
Chemicals with Tata Global Beverages and has ambitions to be a leader in
the FMCG segment.

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