Wipro, ITC, Cadila prepare binding offers for Complan
BIZ TAKEOVER All three bidders may submit binding bids said to be in the range of $700800 million by September 15
ITC Ltd, Wipro Consumer Care and Cadila Healthcare Ltd are readying to submit binding offers to buy Kraft Heinz India’s popular Complan nutritional drink brand, two people directly aware of the development said.
All three bidders are expected to submit binding bids by September 15, the deadline set by the investment bankers — JP Morgan and Lazard — managing the transaction, the people cited above said on condition of anonymity as the discussions are private.
“The bids are expected to be in the range of $700 to $800 million,” one of the two people cited above said.
Parent Kraft Heinz Co.’s plan to sell Complan came soon after rival GlaxoSmithKline initiated the sale of Horlicks. Complan has around 8% share in the ₹5,500 crore nutritional drink market in India. The segment is dominated by Cadbury’s Bournvita and Nestle’s Boost, apart from Horlicks and Complan.
Malt-based drinks such as Horlicks and Bournvita have, however, seen growth slow from 13.2% in 2014 to 8.6% in 2017, according to Euromonitor International.
As a segment supplement nutrition drinks has registered relatively higher growth than malt-based drinks but has still witnessed its market share slip
MUMBAI:
from 21.3% in 2014 to 11.5% in 2017, Mint reported in June. Over the years several new competitors such as Wander AG’s Ovaltine and Cadila’s ActiLife have entered this segment challenging the dominance of the existing brands.
Emails sent to Kraft Heinz, ITC, Cadila and Lazard remained unanswered, while Wipro Consumer Care and JP Morgan declined to comment.
The Economic Times reported in July that Wipro Consumer, ITC, Cadila, Abbott and Emami along with private equity funds Carlyle and Blackstone, were in exploratory talks with Kraft Heinz to acquire the business.
Kraft is seeking a valuation of close to $1 billion for its consumer foods division which includes Complan and a few other brands, the report said.
The brands of Kraft Heinz, which was formed by the merger of Kraft Foods and Heinz in 2015, in India include Complan, Glucon-D, Nycil, Heinz and Sampriti Ghee. In 2017, Kraft had recognized a $49 million impairment loss due to continued declines in its nutritional beverages business in India, Mint reported in June.
Globally, Kraft Heinz is the fifth-largest food and beverage company. Its popular global brands include Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables and Maxwell.