Tata Consumer’s big appetite for M&As
Tata Chemicals into Tata Global Beverages to form Tata Consumer Products. In came Tata Salt (the largest salt brand in India) to sit alongside Tata Tea (second-largest tea brand in India), Tetley (third-largest tea brand in the UK and the largest in Canada), and others. In 2021, the company acquired food brands Soulfull and Tata Q.
And last week, it acquired Capital Foods, the maker of Ching’s Secret and Smith & Jones, for an enterprise value of about ₹5,100 crore, and Organic India for ₹1,900 crore. Both these companies add to Tata Consumer’s F&B product portfolio. Capital Foods gives it a presence in sauces, chutneys, noodles, soups, and Chinese masalas and pastes.
Organic India gives it a presence in organic tea, infusions and packaged food, and herbal supplements. According to Tata Consumer, it is paying about 6.5 times their combined revenues for brands that are known, fast-growing and high-margin. This is expected to further improve the company’s operating margin on a consolidated basis, which rose from 8% in 2013-14 to about 11% in 2022-23.
It will also further increase the share of revenues from India (71% in 2022-23) and share of revenues from food (58% in 202-23). Acquisitions are at the heart of this change, and Tata Consumer will hope they are easier to absorb, and be more productive, than Tetley. www.howindialives.com is a database and search engine for public data
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