An official statement released by Prabhat Dairy on Monday said that it will be selling its dairy business for Rs 1,700 crore to French multinational Groupe Lactalis.
Prabhat dairy also mentioned in a statement that it will be sharing a “substantial proportion” of the sale proceeds with its shareholders. After the close of this transaction, it will mainly focus on the cattle feed business after the close of the transaction.
Prabhat Dairy has entered into definitive agreements with a subsidiary of Lactalis, ‘Tirumala Milk Products’, for the Rs 1,700-crore sale.
Tirumala Milk Products will acquire Prabhat’s dairy business as well as its step-down subsidiary Sunfresh Agro Industries through a share purchase agreement, as per the statement released by the company.
Vivek Nirmal, Joint Managing Director, Prabhat Dairy, said, “The association with Lactalis one of world’s largest dairy players – will offer this business a strong platform for accelerated growth momentum in becoming one of the largest private dairy businesses in India.”
He also added, “In the last 20 years, Prabhat built world-class integrated milk and dairy products company, with strong supply partnership with over 1,00,000 farmers and two state-of-the-art manufacturing facilities.”
All promoters namely Sarangdhar Ramchandra Nirmal, Vivek Nirmal and Nidhi Nirmal will continue to be associated with the business for the next two years. Also, the acquisition will require regulatory approvals for completion, including a nod from the Competition Commission of India.