ITC to acquire 100% equity of Sunrise Foods by share purchase agreement

On May 23, 2020 ITC Limited entered into a Share Purchase Agreement(SPA) to acquire 100% of the equity share capital of Sunrise Foods Private Ltd(SFPL), which is primarily engaged in spices under the trademark ‘Sunrise’. The value of the deal is not disclosed but expects to be around Rs 1,800 crores to Rs 2,000 crores.

Key Points

• The acquisition will help increase penetration of the Sunrise brand across the country & leverage ITC’s position in the country’s Fast-Moving Consumer Goods (FMCG) market.
• The acquisition is subject to fulfilment of various terms and conditions as specified in the SPA.

Expected Benefits for ITC through its acquisition

i.The proposed acquisition aligns with ITC’s strategy to scale up its FMCG businesses in a profitable manner, leveraging its institutional strengths, the distribution network, agri-commodity sourcing, cuisine knowledge, rural linkages, and packaging know-how.

ii.This acquisition has a potential to add nearly 7% to ITC’s FMCG business & will scale up its spices’ business. The company due to its scale and pan-India presence through its FMCG-Others segment can generate synergies on sourcing and distribution.

iii.The proposed transaction is in line with its philosophy to enhance the competitiveness of agri value chains in India while making a meaningful contribution to increase farmer income

About SFPL(Sunrise):

Sunrise Foods had a turnover of around Rs 600 crores in 2019. But there will be a premium on the 70-year Sunrise brand. 

• It has an extensive presence across east India, where it is the market leader, and also operates in Uttar Pradesh, Delhi, Rajasthan, and Bengaluru 
• Sells its products in Bangladesh and Nepal. Sunrise’s plants are located in Kolkata, Agra, Bikaner, and Jaipur. 

Headquarters– Kolkata, West Bengal

About ITC:

Through its Aashirvaad brand it operates in Andhra Pradesh and Telangana.It has set a turnover target of Rs 1 trillion from its FMCG business by 2030 as it moves to expand revenues beyond its cigarettes business. 

• It already sells popular FMCG brands like Aashirvaad flour, Bingo chips, B Natural juices, Vivel and Yippee noodles.

Few Major acquisitions- Savlon, Shower to Shower(2015): Rs 250- 300 crores; B Natural(2015): Rs 100 crores; Charmis(2017) & Nimyle(2018)- Amount not disclosed
Registered Office– Kolkata, West Bengal
Chairman & MD– Sanjiv Puri