Tata Group’s consumer unit is in talks to buy at least 51% of popular Indian snack food maker Haldiram’s but is not comfortable with the $10 billion valuation sought, two people briefed on the matter said. If successfully concluded, the deal would see the Indian conglomerate directly compete with Pepsi and billionaire Mukesh Ambani’s Reliance Retail. Haldiram’s, a household name in India, is also talking with private equity firms, including Bain Capital, about the sale of a 10% stake, they said. Tata Consumer Products, which owns UK tea company Tetley and has a partnership with Starbucks in India, has baulked at the $10 billion valuation given that Haldiram’s annual revenue is around $1.5 billion, the sources said.
A third person with direct knowledge of the discussions said Tata wants to buy more than 51% but has told Haldiram’s that its “ask is very high.”
A spokesperson for Tata Consumer Products said it “does not comment on market speculation”. Haldiram’s chief executive Krishan Kumar Chutani and Bain declined to comment. In a clarification to stock exchanges, Tata Consumer said it “is not in negotiations as reported”.
“We would like to add that the company evaluates various strategic opportunities for growth and expansion of the business of the company, on an ongoing basis. The company will make appropriate announcements in compliance with the obligations under SEBI (LODR) Regulations, 2015, as and then any such requirement arises,” Tata Consumer added. Haldiram’s has almost 13% share of India’s $6.2 billion savoury snack market. Source: Reuters