In a stock-exchange filing, Ruchi Soya said it had, through a “slump sale”, agreed to pay just over INR600m (US$8.2m) for the business. The company expects to complete the deal in two months.
Ruchi Soya will pay for the business through two payments. Around INR150m will be paid “on or before the closing date”, the company said, with the rest paid within 90 days of the transaction being finalised.
In the 2019-2020 financial year, PNBPL generated a turnover of INR448m.
“This acquisition supports Ruchi’s ongoing strategy to consolidate its position as a leading FMCG player,” the business, which manufactures edible oils and soy-based foods, said in the filing. Ruchi added it “has a strong presence in the soya foods and edible oils segment” and the deal “will create a unique opportunity for Ruchi to participate and create value” in the biscuits sector.
PNBPL’s biscuit portfolio “comprises products with strong market presence and wide reach”, Ruchi asserted. It listed brands including Aarogya, Jeera and Nutty.
“Ruchi and PNBPL being related parties have agreed to a non-compete arrangement under which PNBPL and its respective affiliates including Patanjali Ayurved Limited cannot enter into any competing business of biscuits in India, including entering into joint ventures, partnerships, associations, consultancy or other relationships (directly or indirectly) for any competing business,” the filing read.
Ruchi Soya was acquired by India food major Patanjali Ayurved in 2019. Two years earlier, Ruchi Soya entered a corporate insolvency resolution process in late 2017 leading to interest from a number of potential buyers. Last year, Ruchi Soya was listed on the National Stock Exchange of India.