FMCG major Nestle on Thursday said it will acquire the pet foods business of Purina Petcare India for Rs 123.5 crore, providing Nestle an access to the fast-growing business in the country.
Nestle India on Thursday "approved the acquisition of Pet Foods Business (PFB) from Purina Petcare India through business transfer" with effect from October 1, 2022
FMCG major Nestle on Thursday said it will acquire the pet foods business of Purina Petcare India for Rs 123.5 crore, providing Nestle an access to the fast-growing business in the country.
Both Nestle India and Purina Petcare India are subsidiaries of Swiss major Nestle S.A.
According to a regulatory filing, the board of Nestle India on Thursday "approved the acquisition of Pet Foods Business (PFB) from Purina Petcare India through business transfer" with effect from October 1, 2022.
Nestle S.A. owns 100 per cent of Purina Petcare India and 62.76 per cent of Nestle India.
"The company and Nestle Group have agreed to a value of Rs 123.5 crore as the consideration for the purchase of PFB, which works out to around 3.4 times the turnover of Purina Petcare India for financial year ended March 31, 2022," Nestle India said in the filing.
In 2021-22, Purina Petcare India's turnover was Rs 36.08 crore.
This move will provide Nestle India access to the fast-growing pet foods business, which grew at a compound annual growth rate (CAGR) of 39.4 per cent during 2018-21 and is estimated to increase at a CAGR of 50 per cent from 2022-26.
"Post the pandemic, the category has accelerated to smaller towns and in general retail stores and on e-commerce. With a faster rate of pet adoption along with portfolio and town expansion opportunities, there are significant synergies upon integrating PFB of Purina Petcare India into Nestle India to help unleash the full potential," it said.
Besides, the PFB would scale up its business from the wider distribution and supply chain network of Nestle India, which will effectively reach over 120 towns and accelerate organised trade, it added.