France-based dairy giant Lactalis today (22 January) announced acquisitions in the emerging markets of India and Egypt
The company has snapped up the dairy business of publicly-listed Indian company Prabhat Dairy.
In a separate deal, Lactalis has acquired Cairo-based Greenland Group for Food Industries from Middle East food company Americana Group.
Prabhat was founded in 1998 and has two manufacturing plants producing condensed milk and ghee, according to a statement from Lactalis, which added the company employs more than 1,200 people and recorded a turnover of EUR200m (US$227.1m) last year.
Founded in 1995, Greenland produces cheeses, ghee, milk, juices and other fresh dairy products destined for foodservice channels, according to its website. The company exports to around 50 countries, including the US, the European Union, North Africa and the six-member Gulf Cooperation Council in the Middle East.
In a filing to the Bombay Stock Exchange, Prabhat said the transaction covered its dairy business and its wholly-owned subsidiary Sunfresh Agro Industries. It added Lactalis had agreed to pay INR17bn (US$238m) for the assets.
In the filing, Prabhat said it had “evaluated various strategic alternatives” and insisted the deal “provides the most suitable strategic value proposition and attractive monetisation to the company and its shareholders”.
Vivek Nirmai, the joint managing director of Prabhat, said: “We are pleased to announce this agreement with Lactalis. For the past 20 years, Prabhat has established itself as one of the most-trusted dairy brands in the country. The association with Lactalis will offer this business a strong platform for accelerated growth momentum in becoming one of the largest private dairy businesses in India.”
The assets to be sold to Lactalis account for more than 98% of Prabhat’s revenue. The company plans to focus on its cattle-feed business and expand into animal nutrition and genetics.
“Through these two acquisitions, we pursue our international development objectives and strengthen our leading position in these two countries,” Lactalis said in a Tweet.
A Lactalis spokesperson told just-food the Prabhat acquisition will give it two more additional production facilities in India on top of the 11 it already owns. The company entered India in 2014 when it acquired local processor Tirumala Milk Products. Two years later, Lactalis agreed a deal to buy the dairy business of Indian conglomerate Anik Industries.
It said the purchase of the Prabhat assets is expected to close in the second half of the year and is subject to clearance by the relevant competition authorities, although the finer details of the transaction were not disclosed.
The move for Greenland was conducted through Lactalis’ joint-venture facility, Lactalis-Halawa, which was formed in 1997. Financial details were again not disclosed.
According to Lactalis, Greenland’s main business operations revolve around cheese, with five production sites in Egypt employing 1,250 people.
In the statement announcing the deal, Lactalis said the acquisition will “strengthen” the joint venture’s position as the “major” dairy products manufacturer in Egypt. The deal “testifies to the Lactalis Group’s constant interest in developing the Egyptian market”, the company noted.
The Lactalis spokesperson added: “The acquisition of Green Land will effectively strengthen our position in the cheese category, but since the start of the partnership with Halawa we always worked to build a strong position in all the categories of dairy products such as p-processed cheese, then white cheese, yogurts since 2008/09 and UHT milk since 2011.”
The deals are the latest for Lactalis in emerging markets. Last year, the company bought the Malaysian assets of Swiss food group Nestlé to include the latter’s operations in chilled dairy, the production of cold sauces and the packing of milk powder.
It also bought up the infant-formula business of Aspen Pharmacare in South Africa, giving the French dairy company ownership of the Alula, Infacare and S-26 brands. And it also acquired a majority stake in Lebanese company Hanilor, which specialises in the distribution of Lactalis’ Smeds-brand cheese products, as well as other dairy foods such as butter, cream and powdered milk.