Agro Tech to acquire Del Monte in Rs 1,300 crore share swap

Agro Tech Foods, backed by Samara Capital, is set to acquire Del Monte Foods, a Bharti Enterprises and Del Monte Pacific joint venture, through a Rs 1,300 crore (US$ 156 million) share swap deal. As part of the agreement, Agro Tech will issue 13.3 million shares to current stakeholders Bharti (59.29%) and Del Monte Pacific (40.7%), making Del Monte a wholly owned subsidiary.

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Agro Tech Foods, funded by Samara Capital, would buy Del Monte Foods, a joint venture between Bharti Enterprises and Del Monte Pacific, in a share swap for more than Rs 1,300 crore (US$ 156 million).

Agro Tech would issue 13.3 million shares at Rs 975.5 each to its current shareholders, Bharti (59.29%) and Del Monte Pacific (40.7%), as payment for their ownership, the company said on Thursday. Del Monte will become a completely owned subsidiary of Agro Tech Foods. Agro Tech will rebrand as Sundrop Brands.

Notably, upon conclusion of the transaction, Bharti Enterprises will become the second-largest shareholder in Agro Tech, with a 21% stake. Samara Capital will become Agro Tech’s largest stakeholder, with 31%, up from 51%. Agro Tech announced that Del Monte Pacific will acquire a 14% share in the company.

Furthermore, Agro Tech will have an exclusive, permanent licence for the Del Monte brand in India, providing long-term access to the brand for its expanding consumer base.

According to Harjeet Kohli, joint managing director of Bharti enterprises, “There are no intentions to exit food. The goal is to combine Agro Tech’s food company, which includes Sundrop edible oil and Act II popcorn, with Del Monte’s, which sells branded processed foods and beverages.” While both businesses can integrate and grow organically, there is nothing that prevents the company from purchasing brands in adjacent markets.”