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LT Foods set to buy Hungary's Global Green for Rs 25 million
Synopsis
LT Foods makes a significant move by acquiring Global Green Europe Kft, a leading Hungarian company specializing in processed and canned foods. This ₹25 million deal orchestrated through its European subsidiary marks LT Foods' strategic entry into the canned food sector, aiming to amplify synergies with its ongoing European initiatives. The acquisition awaits approval from Hungarian FDI authorities.
Packaged foods and staples maker LT Foods has signed a definitive agreement to acquire 100% stake in Hungary-based processed and canned foods maker Global Green Europe Kft for ₹25 million via its European subsidiary, the company announced in an exchange filing on Tuesday.
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The deal includes two support entities and is subject to FDI approval, the company said, adding that the acquisition will help it diversify into a large addressable market.
The Hungarian operations of Global Green were established in 2006 following the acquisition of the erstwhile Intergarden NV with operations now in more than 30 countries across Europe, LT Foods said in a detailed statement. The European firm makes and sells sweet corn gherkins, silver skin onions, peas and sour cherries in jars and cans, and has two manufacturing sites. It has an annual turnover of ₹40 million and a workforce of over 170 employees, according to the statement. The acquisition will be executed through LT Foods Europe Holdings, a wholly-owned step-down subsidiary of LT Foods. Under the agreement, LT Foods will pay ₹6 million at closing for 100% equity shareholding, with the remaining ₹1.8 million payable over the next two years through an earn-out mechanism besides taking over the borrowings, the company said. The transaction includes the acquisition of Global Green International (UK) and Greenhouse Agrar Kft, which are its support and distribution entities. The deal is subject to FDI approval in Hungary, it added.
"The acquisition of Global Green Europe Kft enables us to enter the processed canned food market, leveraging synergies with our existing business in Europe," VK Arora, executive chairman of LT Foods, said in the statement.
The ₹8,770 crore LT Foods makes Daawat and Royal basmati rice, Ecolife staples and Kari Kari snacks. "This category is estimated at ₹15 billion across Europe," the company said. It added that the acquisition provides synergy with LT Foods' existing business in Europe, offering the potential for cross-selling and efficiencies across the value chain. Prowess Advisors, a food and agribusiness-focused investment banker, acted as the exclusive transaction advisor for LT Foods on this deal, it said in the statement.
