Mumbai: Kraft Heinz Co. will sell part of its Indian business, including brands such as malt-based drink Com-plan and energy drink Glucon-D, for Rs 4,595 crore ($627.18 million), at a time when Indian consumers are demanding healthier, sugar-free alternatives.
Indian pharmaceutical and consumer products company Zydus Wellness Ltd and its parent Cadila Healthcare Ltd will jointly buy the assets to expand their portfolio to also include brands such as talcum powder Nycil and clarified butter, Sampriti Ghee, the companies said in a statement on Wednesday.
Complan, along with GlaxoSmithKline’s health drinks brands Horlicks, was very popular until about a decade ago, when consumers used these products for supplemental nutrition along with milk.
Their popularity has since waned, with sales growth slipping, as consumers grew wary of the sugar content in these products and the health claims made by these brands.
“The sale of this niche business fits into our overall global growth strategy and our focus on investing in and growing brands within our core categories,” US-based Kraft Heinz chief executive Bernardo Hees said in a statement.
Glaxo’s Horlicks is also up for sale and sources said last month that Nestle, Unilever, and Coca-Cola are among the bidders for the business that could fetch more than $4 billion.
Tater Tots-maker Kraft Heinz, which will also sell two manufacturing facilities as part of the deal, said on Wednesday it will continue to grow its Heinz sauces and other Kraft businesses in India.
The deal value includes net working capital of '40 crore and cash of '15 crore, but does not assume any debt, Zydus said here in a statement.
The deal will give Zydus, majority owned by Cadila, a chance to leverage its position in the health-food and nutrition segment. The company, which owns sugar substitute Sugar Free, had bought premium healthy fat spread Nutralite in 2006.
The Kraft Heinz assets that had a network of over 800 distributors in 29 states reported revenue of about '1150 crore for the 12 months ending June, Zydus noted, adding that the deal will push Zydus’ annual revenue to '1,700 crore. — Reuters
