ITC Ltd., a multinational conglomerate company, is reportedly acquiring Sunrise Foods, a city-based packaged spice maker. The company has entered a SPA (share purchase agreement) to obtain 100% of SFPL’s (Sunrise Foods Private Ltd.) equity share capital for an undisclosed sum.
Operating under the trademark, ‘Sunrise’, Sunrise Foods is a 70 years old legacy brand, which is engaged in the spice business. It is a market leader in the category for packaged spices, both in blended and basic segments, in eastern India. ITC reportedly stated that the recent SPA is subject to the fulfillment of several terms & conditions as being specified. The company further added that this purposed acquisition is expected to boost the product portfolio & is aligned to the objective of ITC to considerably scale the spices business as well as expand its footprint in India.
Sources familiar with the matter have stated that the proposed acquisition is aligned with the strategy of ITC to rapidly increase the company’s FMCG business and gain more profits.
According to Abneesh Roy, Senior VP, Institutional Equities at Edelweiss Securities, ITC has maintained a synergy with its business and it has a strong understanding of consumer preferences as well, due to its hotel business. The recent deal can be considered a positive development for the conglomerate among its diversified portfolio, Roy claims. He also said that it was better to acquire a market leading firm rather than forming a new brand, adding that consumers are increasingly shifting their preferences from unbranded to branded products due to the high focus on quality, trust, and safety, owing to which branded spices can be considered a high growth segment.
ITC has been offering a range of spices under the brand name, Aashirvaad, and the company claims to be a leader in Andhra Pradesh and Telangana markets. It is also leading the market in exporting high-quality spices.