Spices company McCormick planning to acquire Indian spice firms Eastern, Lalah’s

US-based McCormick, the world’s largest spice and seasoning company, is scouting for other Indian companies after its failure to buy MTR Foods, later bought by Orkla Foods of Norway. McCormick is looking at some other South-based spice brands such as Eastern and Lalah’s.

The Rs. 170 crore-Eastern is one of the bigger local players in the packaged spices market. Eastern, with a predominant presence in the southern markets, has been interested in a better national spread through the inorganic route. Private equity firm New Vernon is already an investor in the company. It’s learnt that the McCormick team had also visited other players in the packaged spice market such as MDH and Lalah’s.

McCormick’s joint venture company in India, the Kochi-based AVT McCormick, engaged in processing and exports of spices, is reportedly helping the US company with its acquisition plans. McCormick’s Indian JV, which kicked off in 1994, exports Rs. 100 crores worth of value-added spices to developed markets. AVT has over eight decades of experience in agri-business including rubber, tea and a portfolio of spices.

Read The Economic Times article.

Norwegian company to buy MTR Foods for Rs. 350 crores

Norwegian food company Orkla Foods may turn out to be the acquirer of South-based MTR Foods. The deal size is said to be around Rs. 325-350 crores. Earlier, US spice company McCormick was widely tipped to take over MTR. However, the deal fell through at the last minute due to differences over structuring of the deal, particularly on certain intellectual property issues relating to the brand name.

Orkla is keen on acquiring MTR as it will provide a launch pad for Indian operations. The Norway-based company has presence in bakery, seafood, pizzas, pies, taste enhancers and snacks. In the past, Orkla has grown its international presence through acquisitions in Romania, Sweden, Denmark and Iceland. Orkla Foods is part of Orkla ASA, one of Norway’s largest listed companies with its core businesses being branded consumer foods, specialty materials and financial investments.

MTR’s brand pull is such that several large Indian corporates, including Tata Coffee, ITC, Godrej and several PE funds like Blackstone, Indivision and Actis had shown interest in the company. NM Rothschild was the investment banker for MTR, and had estimated a value of Rs. 300 crores on the company when it called for bids earlier this year. The Maiya family controls 59% stake in the company directly and indirectly, with JP Morgan holding 26% stake. Another fund, Aquarius, holds 14-15%. MTR’s portfolio comprises ready-to-eat, ready-to-cook food ingredients and spices.

Read The Economic Times article for more details.