Edible oil maker Ruchi Soya has announced the acquisition of food retailer Acharya Balakrishna’s Patanjali Ayurveda for Rs 690 crore as per the prospectus of follow-on public offer (FPO) with SEBI.
The acquisition will take place in three stages. In the first phase, 15 per cent of the total purchase consideration or Rs 103.50 crore will be paid simultaneously with the execution of the Business Transfer Agreement (BTA) or within three days of the BTA coming into force.
In the second phase, 42.5 per cent of the total purchase consideration or Rs 293.25 crore will be paid on the last date. In the third phase, 42.5 per cent of the total purchase consideration or Rs 293.25 crore will be paid within 90 days from the last date.
Patanjali Ayurveda’s food business has 21 main products – ghee, spices, juice, honey, flour etc. In the year ended March 31, 2022, the turnover of Patanjali Ayurveda was about Rs 10,605 crore.
As part of this proposed acquisition, Patanjali Ayurveda will have 98.5 per cent equity of Patanjali Ayurveda, the promoter and chairman of Acharya Balakrishna. Ruchi Soar will be the managing director and promoter Ram Bharat Patanjali will be the director of Ayurveda, according to the exchange filing on May 18.
“The acquisition of the food retail business venture as a precautionary measure on the basis of a recession will expand the company’s existing product portfolio,” the filing said.
“Through this acquisition, the company further states that it has reaffirmed its position as a strong FMCG company on its way to becoming a major player in the FMCG space, which was committed to its shareholders during its first FPO.”
The board of directors of Patanjali Foods Limited in a meeting on May 9 approved the transfer of food retail business to Ruchi Soya Industries. There will be Ruchi Sowar Haridwar Materials and a manufacturing plant at Newasa in Maharashtra.
Meanwhile, the Registrar’s Office of the Company under the Ministry of Corporate Affairs has also approved the renaming of the company from Ruchi Soya Industries Limited to Patanjali Foods Limited.
It added, “However, care must be taken that the proposed name cannot be made available for more than 60 days from the date of approval and this authorization does not constitute any kind of entitlement. It is clear that the name should not have been allowed. ”
On April 11, the board of directors of Ruchi Soar decided to change the name of the company to Patanjali Foods. Baba Ramdev said, “We are making sure that there is no overlap in the group’s various businesses. It is a marriage between Patanjali and Ruchi Swar. Now there is a non-competitive agreement between the group firms. ” He added that it would further boost the business and help Patanjali become the largest consumer goods company in the next few years.