Hindustan Unilever to sell its rice export business to LT Foods1 min read . Updated: 18 Mar 2016, 12:52 AM IST
The decision to sell these units is in line with HUL's strategy to exit non-core businesses
New Delhi: Hindustan Unilever Ltd (HUL), the country’s largest household goods maker, said on Thursday it has agreed to sell its rice export business to Delhi-based LT Foods Ltd that sells rice under Daawat brand for an undisclosed sum.
The announcement comes six months after the local arm of Anglo-Dutch Unilever Plc sold its bread and bakery business under the Modern brand to Nimman Foods Pvt. Ltd, a company backed by private equity fund Everstone Group, for an undisclosed amount.
The decision to sell these units is in line with HUL’s strategy to exit non-core businesses, while continuing to drive its growth agenda in the core packaged foods business, the company said in a statement.
While the company did not disclose the deal size, the rice export business, according to the company statement, registered sales of ₹ 51 crore according to the audited financials for the year 2014-15. HUL exports rice under two brands—Gold Seal Indus Valley and Rozana.
“The deal envisages transfer of the brands and inventory for a consideration of ₹ 25 crore, subject to adjustments on closing. The transaction is subject to fulfilment of certain conditions and the parties will work together to complete this over the next few months. HUL will continue to manage the business until the completion of the transaction," HUL said in a statement.
HUL started exporting basmati rice in 1985 to the Middle East and Europe and then spread wings to 21 countries catering he mid segment of the market.
Sanjiv Mehta, chief executive and managing director of HUL, said: “Given the context of our portfolio priorities, we believe that it is in the best interest of the business to sell these brands to a strategic player such as LT Foods, who is capable and well positioned to unlock their full potential."
The announcement came after the stock market closed. HUL’s shares rose 0.68% to ₹ 849.30 on BSE, while the benchmark Sensex fell 0.02% to 24,677.37 points on Thursday.