Tata Consumer Products Limited (TCPL) has signed definitive agreements to acquire 100% shares of Tata SmartFoodz Limited (TSFL) from Tata Industries Limited for a cash consideration of 395 crore. This move is consistent with TCPL’s strategic intent to expand into value-added categories.
TSFL commenced operations in 2019 and within a short time has established itself as the number two player in the ready-to-eat (RTE) market in India. It has a state-of-the-art manufacturing facility in Sri City, Andhra Pradesh. TSFL, under the brand name Tata Q, offers a range of products manufactured using MATS technology in India. This technology helps retain taste, texture and nutrients within an ambient supply chain, the company said.
The acquisition will enable TCPL to expand its product portfolio and enter the RTE segment. In India, the category is expected to grow at a significant pace benefitting from demographic tailwinds such as urbanization, 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 where TCPL already operates. Tata Consumer Products will leverage its existing domestic and International distribution and focus on operational excellence to maximize value. The technology will also enable TCPL to create a strong pipeline of value-added products in other parts of the foods business.
Sunil D’Souza, MD and CEO, Tata Consumer Products, said: “RTE is a fast-growing segment in India and a sizeable opportunity in the international markets. The acquisition will give us access to a unique technology and the product portfolio synergizes well with our existing distribution infrastructure both in India and internationally."