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Edible oil maker Ruchi Soya to acquire Patanjali Ayurved’s food retail biz 

Edible oil maker Ruchi Soya to acquire Patanjali Ayurved’s food retail biz 

Patanjali Ayurved’s food business comprises 21 major products – Ghee, Spices, Juices, Honey, Atta, etc. 

Board of directors at Patanjali Foods Limited approved the transfer of food retail business to Ruchi Soya Industries in a meeting on May 9 Board of directors at Patanjali Foods Limited approved the transfer of food retail business to Ruchi Soya Industries in a meeting on May 9

Edible oil manufacturer Ruchi Soya has announced the acquisition of the food retail business Acharya Balkrishna’s Patanjali Ayurved at Rs 690 crore in keeping with its prospectus on the follow-on public offer (FPO) with capital markets regulator SEBI.  

The acquisition will take place in three tranches. In the first tranche, 15 per cent of the total purchase consideration or Rs 103.50 crore shall be paid simultaneously with the execution of the business transfer agreement (BTA) or within three days from the execution of the BTA.  

In the second tranche, 42.5 per cent of the total purchase consideration or Rs 293.25 crore shall be paid on the closing date. In the third tranche, 42.5 per cent of the total purchase consideration or Rs 293.25 crore shall be paid within 90 days from the closing date.  

Patanjali Ayurved’s food business comprises 21 major products – Ghee, Spices, Juices, Honey, Atta, etc. Turnover of Patanjali Ayurved for year ended March 31, 2022 stood at around Rs 10,605 crore.  

As part of this proposed acquisition, promoter and Chairman of PatanjalI Ayurved Acharya Balkrishna will hold 98.5 per cent of the equity of Patanjali Ayurved. Ruchi Soya’s Managing Director and promoter Ram Bharat will be the Director at Patanjali Ayurved, as per Ruchi Soya’s exchange filing dated May 18.  

The filing read, “The acquisition of food retail business undertaking as a going concern on a slump sale basis will result in expansion of the existing product portfolio of the Company.” 

“With this acquisition, the company also informed that it has reaffirmed its position to be a strong FMCG company in its journey towards becoming a major player in the FMCG space as committed to its shareholders at the time of its maiden FPO.” 

Board of directors at Patanjali Foods Limited approved the transfer of food retail business to Ruchi Soya Industries in a meeting on May 9. Ruchi Soya will have manufacturing plants located at Haridwar’s Padartha and Maharashtra’s Newasa.  

Meanwhile, Office of Registrar of Companies under the Ministry of Corporate Affairs also approved the change in the name of company from Ruchi Soya Industries Limited to Patanjali Foods Limited.  

It added, “Still it must be taken care that the proposed name cannot be made available for a period exceeding 60 days from the date of approval and this approval does not grant any kind of right of privilege. The name is liable to be withdrawn at any time before approval of the name change, if it is found later that the name ought not to have been allowed.” 

The board of directors at Ruchi Soya decided to change the company’s name to Patanjali Foods on April 11. Baba Ramdev said, “We are making sure there is no overlap in the different businesses of the group. This is a marriage between Patanjali and Ruchi Soya. There is now a non-compete agreement between the group firms.” He added this will further boost business and help Patanjali become the largest consumer goods company in the next few years.

Published on: May 18, 2022, 2:53 PM IST
Posted by: Mehak Agarwal, May 18, 2022, 2:49 PM IST