FMCG major Dabur India Ltd on Wednesday said it has signed an agreement to acquire a majority stake in packaged spices company Badshah Masala Pvt Ltd. Dabur said it will acquire 51 per cent stake in Badshah for ₹587.52 crore, “less proportionate debt as on the closing date”, with the Badshah enterprise valued at ₹1,152 crore.

Mohit Burman, Chairman, Dabur India Ltd said, “The Indian spices and seasoning category is a large and attractive market. Badshah Masala is one of the key players in this space. Our investment in Badshah Masala will help expand this business and continue to provide unmatched quality products. This acquisition will accelerate our growth strategy as we continue to build our foods business. We intend to leverage our international market presence to grow this business globally.”

Expansion strategy

This acquisition is in line with Dabur’s strategy to expand its foods business to₹500 crore in 3 years and expand into new adjacent categories. This also marks Dabur’s entry into the over ₹25,000 crore branded spices and seasoning market in India.

Chief Executive Officer of Dabur India Ltd, Mohit Malhotra, added, “Branded spices market in India is growing at healthy double digits, led by increasing consumption, upgradation from unbranded to branded and growing preference for regional flavours across States. The market is dominated by regional players and holds significant potential for growth in the future. Dabur has an existing foods portfolio and views ground and blended spices as a good addition to this portfolio. Badshah portfolio will gain from Dabur’s extensive distribution reach. We look forward to unlocking further synergies and market opportunities to capture the full potential of Badshah Masala.”

The FMCG major said that it expects this transaction to be Cash EPS neutral in the first year and accretive thereafter. “The acquisition is expected to be completed within this fiscal. As per our agreement, we will acquire the balance 49 per cent shareholding after 5 years,” the company added.

Badshah Masala has two manufacturing facilities located in Gujarat and sells 52 products in the ground spices, blended spices and seasonings space in India and international markets. Blended spices forms nearly 83 per cent of the company’s revenues.

“We are delighted to enter into a strategic partnership with Dabur. Dabur stands for trust and heritage and joining hands with Dabur will help drive the future growth potential of Badshah on a stronger trajectory. Our companies are a great fit. This transaction will enable us to accelerate our growth by adding our products to Dabur’s broad portfolio to meet the needs of consumers across geographies,” said Hemant Jhaveri, MD, Badshah Masala Pvt Ltd.

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