Ruchi Soya plans to buy Patanjali Ayurved's food retail business in order to accelerate its transformation into a leading FMCG company. This will include the transfer of employees and distribution networks from Patanjali-owned manufacturing units in Padartha district, Haridwar in Uttarakhand, and Newasa in Maharashtra.
In 2019, Baba Ramdev's Patanjali Group acquired Ruchi Soya through an insolvency process.
"The acquisition is valued at a fair market value (Net) of 690 crore based on all fixed assets of the food division and respective current assets on a slump sale basis," the company stated in a BSE filing.
Patanjali's food business includes 21 major products such as ghee, honey, spices, juices, and atta. The purchase is scheduled to be completed by July 15. Ruchi Soya's name will be changed to Patanjali Foods following the acquisition.
The proposed transaction is a related-party transaction. "With this acquisition, the company also informed that it has reaffirmed its position as a strong FMCG company on its journey to becoming a major player in the FMCG space as committed to its shareholders at the time of its maiden FPO," the company said.
It also stated that the Patanjali Ayurved Board of Directors has approved the transfer of food business to Ruchi Soya Industries, with an effective date of May 9. "This strategic initiative for the acquisition of a food business will strengthen its food product portfolio with an array of brands while also contributing to revenue and profit growth."
About Ruchi Soya:
Ruchi Soya is India's largest producer of edible oil. Patanjali Ayurved purchased it in 2019. Ruchi Soya Industries Limited, through its subsidiaries, primarily in India, manufactures and sells edible oils, vanaspati, bakery fats, and soya food. It also sells soya chunks, granules, and soya flour. The firm is a subsidiary of the Ruchi Group. The company exports agricultural commodities such as raw cotton. It obtains material from close business associates (direct ginners) located throughout India.
