The Nagpur and Delhi faction of the Haldiram Group are merging to form Haldiram Snacks Food which will own the entire food and snacks business. The big PE firm Blackstone along with AID and GIC are looking for a stake of nearly 76% in the merged entity which is supposed to be one of the biggest business buyout deals in India.
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The Story of Evolution of Haldiram’s
The country’s one of the most popular FMCG brands, Haldiram’s, was started by Mr. Ganga Bishan Agarwal (Haldiram Ji) nearly 8 decades ago in Bikaner. A few years later, at the beginning of the 1950s, he formed a partnership firm with his sons: Moolchand, Rameshwarlal, and Satyanarayan.
After a successful expansion into Kolkata, in 1958, Rameshwarlal exited the partnership but was allowed to use the brand name ‘Haldiram’ only in Kolkata. The partnership was now in the name of Haldiram, Satyanarayan, Moolchand, and Shiv Kishan. In 1969, Haldiram dissolved the second partnership and formed another partnership with his son Moolchand, his grandson Shiv Kishan, and his daughter ln law, Rameshwarlal’s wife, Kamala Devi, who took the place of his third son, Satyanarayan. However, this partnership too, dissolved in 1974.
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Stakes after proposed Merger
The 2 groups of the Haldiram are the Haldiram Foods International, headed by the Nagpur family, and Haldiram Snacks, headed by the Delhi family. These 2 divisions are aiming for a merger and the merged entity will be called as Haldiram Snacks Food Pvt Ltd.
The Nagpur-based division recorded INR 3,622 crore in revenue in FY22, while the Delhi-based Haldiram Snacks Private Limited recorded INR 5,248 crore in revenue during the same financial year. The Delhi side headed by Manohar Agarwal and Madhu Sudan Agarwal, will hold 55% while the Nagpur Kamalkumar Shivkisan Agarwal will hold the remaining 45%.
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But Why is Haldiram’s in the news now?
This merger is said to materialise within the next 3 to 4 months as formalities are already underway with the NCLT. The restaurant business, valued at INR 1,800 crore, is excluded in the merger transaction. The third bloc based in the east, is not involved in the merger process.
Once the merger is through, the merged entity has 2 proposals for stake acquisition. One of the proposals is made by Blackstone, Abu Dhabi Investment Authority and GIC of Singapore for nearly 76% stake of the company, after the valuation of the business at $8-8.5 billion.
Another proposal is by Bain Capital and Temasek of Singapore, a non-binding offer after the same valuation as Blackstone Consortium. Apparently, Haldirams’ had been in discussions with Bain for the past 7 months. This deal executed by either Blackstone Consortium or Bain Capital will be the largest buy-out deal in India till date. Similarly, last year, Tata Group wanted to acquire Haldirams. But they were asking for a valuation of $ 10 billion which was unsettling for the Tata Group.
