The Coca-Cola Co., the world’s largest beverage company, and the Zydus Cadila Group have emerged as the two strongest contenders for the consumer portfolio of Kraft Heinz in India, which includes the children’s milk drink Complan, people with knowledge of the matter said.
The two are expected to submit binding bids in the coming days amid final negotiations. In August, Kraft Heinz had narrowed the list of bidders for a second round of talks and shortlisted some of the biggest food and consumer companies including Tata Group, Wipro Consumer, Dabur India and Danone along with Coca-Cola and Zydus Cadila.
However, a sprawling product portfolio, Complan’s uncertain growth prospects and regulatory hurdles have led to most either opting out or waiting for future carve-out opportunities.
Nestle, Emami and ITC were the other contenders that had explored the opportunity but were either not shortlisted or didn’t want to participate after initial evaluations.
Kraft Heinz has been seeking about $1 billion for the assets and had mandated investment bank JP Morgan earlier this year to manage a formal sale process.
But potential bidders have balked at the valuation as they feel shifting consumer tastes and preferences may not be kind to brands such as Complan and Nycil talcum powder, sources said. Bids are mostly expected to be in the $550-600 million range, they said.
Coca-Cola declined to comment. Zydus Cadila didn’t respond to emails sent on Tuesday.