Mumbai: Prabhat Dairy has said it will be selling its flagship dairy business for Rs 1,700 crore to French multinational Groupe Lactalis.
In an official statement released here, Prabhat said it will be sharing a "substantial proportion" of the sale proceeds with its shareholders and will focus on the cattle feed business after the close of the transaction.
The company has entered into definitive agreements with Tirumala Milk Products, a wholly-owned subsidiary of Lactalis, for the Rs 1,700-crore sale, said the statement.
The transaction involves sale of the dairy business undertaking of Prabhat Dairy by way of slump sale on a going concern basis, as well as the sale of 100 per cent shareholding in Sunfresh Agro Industries, a subsidiary of Prabhat Dairy, via a share purchase agreement, it said.
"The association with Lactalis one of worlds largest dairy players - will offer this business a strong platform for accelerated growth momentum in becoming one of the largest private dairy businesses in India," Vivek Nirmal, Joint Managing Director, Prabhat Dairy, was quoted as saying in the statement.
He said in the last 20 years, Prabhat built a world- class integrated milk and dairy products company, with strong supply partnership with over 1,00,000 farmers and two state- of-the-art manufacturing facilities.
The acquisition is subject to regulatory approvals, including nod from the Competition Commission of India, the statement said.
Promoters Sarangdhar Ramchandra Nirmal, Vivek Nirmal and Nidhi Nirmal will continue to be associated with the business for the next two years, the statement said.