Heritage Foods Ltd on Friday said it will acquire the dairy business of Reliance Retail through a slump sale.
The company has executed a binding agreement for the acquisition. The proposed transaction is subject to regulatory approvals and other conditions and procedures that are customary for similar transactions, Heritage Foods Ltd said in a BSE filing.
The management of both companies believe that there exist strong synergies between the dairy business of Reliance Retail Ltd (RRL) and Heritage Foods with high growth potential in certain existing markets such as Punjab, Mumbai and Delhi-NCR along with new opportunities in states such as Punjab, Uttarakhand and Rajasthan, it added.
“Post the transaction, RRL will continue to trade in dairy products, including Heritage dairy products through its retail and wholesale channels,” the company said.
RRL’s dairy business operates a pan-India dairy procurement, processing and distribution platform under two brands -- Dairy Life and Dairy Pure. It offers a range of products such as packed milk, flavoured milk, butter, ghee, curd, dairy whitener, sweets and skimmed milk powder.
It procures 2.25 lakh litres of milk per day from 2,400 villages in 10 states. Started in 2007, it had a revenue of Rs 553 crore in 2015-16, the filing said.