US-based breakfast cereal giant Kellogg’s is eyeing a stake in India’s leading snack maker Haldiram’s. The company is seeking to diversify its local portfolio nearly 25 years after entering the market. Kellogg’s and Haldiram’s are in exclusive talks about this deal.
The exclusive talks involve two of the three branches of the company — Delhi-based Haldiram Ethnic Foods and its affiliates, and Nagpur based Haldiram’s Food International and affiliates that cater to the western and southern markets.
The worth of these two businesses is believed to be valued at around $3 billion (Rs 20,000 crore), after excluding the restaurants business.
A spokesperson for Kellogg India said, “As per our policy, we don’t comment on rumours or speculation regarding potential acquisitions, JVs or divestitures.”
Kellogg is supposed to be pressing for a 51 percent stake in the two divisions while the Agarwal family is not keen to cede control and prefers a 25 percent dilution. This matter has been discussed with the management over several management meetings from both sides. The eastern faction of the family that manages Haldiram Bhujiawala from Kolkata is not part of the transaction. It is also the smallest of the three. The Delhi and Nagpur divisions, together, are expected to end FY19 with sales of Rs 4,500-5,000 crore and profit of Rs 450-550 crore.
Kellogg has been in negotiations with the Agarwal family for close to a year, and it seems talks have picked up pace recently.