Tata Group's consumer unit is in talks to buy at least 51% of popular snack food maker Haldiram's but is not comfortable with the $10-billion valuation sought, said a report on Wednesday.
If successfully concluded, a deal would see the Indian conglomerate directly compete with Pepsi and billionaire Mukesh Ambani's Reliance Retail.
Haldiram's, a household name in India, is also talking with private equity firms including Bain Capital about the sale of a 10% stake, reported Reuters quoting sources.
Tata Consumer Products Ltd, which owns UK tea company Tetley and has a partnership with Starbucks in India, is negotiating the stake purchase, the report said.
The report quoted a source as saying that Tata wanted to buy more than 51% but has told Haldiram's that its "ask is very high".
The potential acquisition represents an exciting opportunity for Tata, the source said, adding: "Tata (Consumer) is seen as a tea company. Haldiram's is huge in the consumer space and has a wide market share."
The Company will make appropriate announcements in compliance with the obligations under SEBI (LODR) Regulations, 2015, as and when any such requirement arises, Tata Consumer told BSE, NSE.
"The Company is not in negotiations as reported in the above-referred news article. We are not aware of any information that has not been announced to the Exchanges, which requires disclosures under Regulation 30 of the SEBI (LODR) Regulations, 2015. There is no impact of this article on the Company. We would like to add that the Company evaluates various strategic opportunities for growth and expansion of the business of the Company, on an ongoing basis. The Company will make appropriate announcements in compliance with the obligations under SEBI (LODR) Regulations, 2015, as and when any such requirement arises," clarified Tata Consumer in a stock exchange filing.
Family-run Haldiram's traces its origins back to a tiny shop founded in 1937 and is well-known for its crispy "bhujia" snack sold for as little as Rs 10 across mom-and-pop stores.
It has almost 13% share of India's $6.2-billion savoury snack market, according to Euromonitor International. Pepsi, famous for its Lay's chips, also has around 13%.
Haldiram's snacks are also sold in overseas markets like Singapore and the United States. The company has around 150 restaurants selling local food, sweets and western cuisine.
The $10-billion valuation sought by Haldiram's for the deal translates to 6.6 times its annual revenue of $1.5 billion, reported Reuters.
Family-run Haldiram's traces its origins back to a tiny shop founded in 1937 and is well-known for its crispy "bhujia" snack sold for as little as Rs 10 across mom-and-pop stores.
It has almost 13% share of India's $6.2-billion savoury snack market, according to Euromonitor International. Pepsi, famous for its Lay's chips, also has around 13%.
Haldiram's snacks are also sold in overseas markets like Singapore and the United States. The company has around 150 restaurants selling local food, sweets and western cuisine.
Purchasing Haldiram's would significantly expand Tata's consumer products reach.