Norway’s Orkla to buy 68% of spice maker Eastern Condiments

BENGALURU: Norwegian food company Orkla will buy about 68% stake in Eastern Condiments for about Rs 1,360 crore, a spice maker from Kerala, which will help the company double its sales in India. The deal values Eastern at Rs 2,000 crore.
The deal involves Orkla – through its subsidiary MTR Foods – acquiring about 42% in Eastern from the Meeran family, the founders, and another 26% from McCormick Ingredients SE Asia, Singapore company involved in wholesale distribution of groceries.Before the transaction, the Meeran family owned 74% of Eastern.
Post the deal, Orkla will look to merge Eastern Condiments with MTR. The merged company will be jointly owned by Orkla and the two brothers Firoz and Navas Meeran, with an ownership stake of about 90% and 10% respectively.
“By joining forces, Eastern and MTR will create a solid platform in the fast-growing Indian market, based on strong local brands. MTR has been a great success story for Orkla. Now we look forward to continuing the journey with the Meeran brothers as partners”, says Orkla president & CEO Jaan Ivar Semlitsch.
Orkla is already present in India through MTR, whose sales has grown five-fold since it was acquired in 2007. For the last 12 months ending June 30, MTR had a turnover of Rs 920 crore.
The deal comes months after ITC bought Sunrise Foods in an all cash deal for Rs 2,150 crore and private equity major General Atlantic looking to buy a controlling stake in Mumbai-based Badshah Masala.
Eastern, set up in the 1980s, sells spice powders, masala blends, pickles and biriyani mixes, has seven production facilities in four states and employs 3,000 people. For the last 12 months ending June 30, it has a turnover of Rs 900 crore. About half of it comes from its home state.
Orkla has a solid track record of building leading food brands based on a strong organisational culture and company values. Together with MTR, and as part of Orkla, we will have a stronger platform for our successful operations,” says Navas Meeran, chairman of Eastern.