MTR Foods to acquire Kerala-based Eastern Condiments

In a major development in the food and beverages industry, MTR Foods is set to acquire one of South India’s leading spice makers, Eastern Condiments. MTR is a wholly-owned subsidiary of Norwegian consumer conglomerate Orkla ASA, and the company will pick up 68 percent stake of Eastern Condiments, resulting in a merger.  The business transaction evaluates Kerala-based Eastern Condiments at Rs 2,000 crore. Orkla’s move is reportedly to increase its footprint in India’s branded spice market. Way back in 2007, Orkla had acquired MTR Foods.  The transaction will see MTR acquire 41.8 percent stake from the Meeran Family, who are the promoters of Eastern. The balance of 26 percent will be picked up from McCormick Spices which holds the stake.  After the first leg of acquisition, an application to merge Eastern with MTR will be submitted and the merged company will be owned by Orkla ASA and the two brothers — Firoz and Navas Meeran, with a split stake of 90.1 and 9.99 percent respectively. Eastern Condiments was founded by Kothamangalam native late ME Meeran in Adimali in 1983. The brand’s name can be traced back to the Eastern Trading Company which Meeran founded in 1968. The company has grown into one of India’s largest spice exporters. Apart from spices, Eastern also sells Puttu Podi and other ready-to-eat food items. They have also diversified to other unrelated fields like mattress manufacturing. They even dabbled in Education and Wind Energy.  The company also acquired actor Mohanlal’s company — Mohanlal’s Taste Buds — in 2007. Three years later, McCormick Spices acquired 26 percent stake in Eastern for Rs 162 crore from a PE Fund and the Meeran Family. The same year, MTR had lost out in the race to McCormick.  According to a spokesperson from Avendus Capital, financial advisors to Eastern and McCormick on the transaction, Eastern and MTR combined have “significant synergy potential in terms of product portfolio and geography.” The deal, according to the representative, “is a testament to the strong interest in branded spices from large F and B players.” Orkla ASA which is headquartered in Oslo is a major supplier of branded consumer goods in the Nordics, Baltics and a few markets in Central Europe and India.