Ruchi Soya Industries To Change Name To Patanjali Foods, Acquires Its Food Business For Rs 690 Crore

The acquired food business consists of 21 products, including ghee, honey, spices, juices, and atta, among other things

In 2017, Ramdev's Patanjali acquired Ruchi Soya through an insolvency process. Image: Getty

Source : Getty

New Delhi: Ruchi Soya Industries on Wednesday announced the acquisition of the entire food business of Patanjali Ayurved under business transfer agreement in a bid to make Patanjali as world's largest FMCG group.

According to the news release by Ruchi Soya Industries, the amount of consideration for the acquisition is Rs 690 crore on a slump sale basis, while the indicative period for completion of the acquisition is July 15, 2022, subject to approval of shareholders and other authorities.

The acquired food business consists of 21 products, including ghee, honey, spices, juices, and atta, among other things.

The board of Ruchi Soya said that it has decided to change the name of company from Ruchi Soya Industries Limited to Patanjali Foods Limited. On the other hand, the board of Patanjali Ayurved has also approved the transfer of the food business to Ruchi Soya Industries, effective May 9.

From now on, Ruchi Soya will get the manufacturing plants located at Padartha, Haridwar, and Newasa, Maharashtra.

The payment will be made in three tranches. In the first tranche, 15 per cent (Rs 103.5 crore) of the total purchase consideration shall be simultaneously paid with the execution of the business transfer agreement or within three days from the execution of the business transfer agreement.

In the second phase, 42.5 per cent (Rs 293.25 crore) of the total purchase consideration shall be paid on the closing date defined under the business transfer agreement and in the third tranche, the remaining 42.5 per cent (Rs 293.25 crore) of the total purchase consideration will be paid within 0 days from the closing date. The transaction is expected to complete by July 15.

"The transaction shall consist of transfer of employees, assets (excluding Patanjali’s brand, trademarks, designs and copyrights), current assets (excluding debtors, vehicles, cash and bank balance) contracts, licenses and permits, distribution network, customers related to the Food Retail Business Undertaking of Patanjali Ayurved," the company on Wednesday informed in an exchange filing.

In 2017, Ramdev's Patanjali acquired Ruchi Soya through an insolvency process.

The shares of Ruchi Soya were trading at Rs 1,179.80, up 8.94 per cent on the BSE on Wednesday.