Reliance Completes Acquisition Of 51% Stake In Lotus Chocolate Company
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Reliance Consumer Products (RCPL), the fast-moving consumer goods (FMCG) arm of Reliance Retail Ventures (RRVL), announced on Thursday that it has finalised the acquisition of a controlling stake in Lotus Chocolate Company Ltd.
RCPL completed the acquisition of a 51 per cent shareholding in Lotus Chocolate for an aggregate consideration of Rs 74 crore and subscribed to Lotus non-cumulative redeemable preference shares for an aggregate consideration of Rs 25 crore.
RCPL has also completed the acquisition of equity shares pursuant to the open offer made under the Securities and Exchange Board of India (Sebi) Takeover Regulations. RCPL took sole control of the company with effect from May 24, 2023, it said in its statement.
RCPL announced in late December that it will acquire 51 per cent of Lotus Chocolate Company for Rs 74 crore and will also buy another 26 per cent in an open offer.
The capital infused by the FMCG arm of Reliance Industries will help drive the growth and expansion of Lotus into a comprehensive confectionery, cocoa, chocolate derivatives, and related products manufacturer across the industrial and consumer market spectrum, the company said in a statement.
"The investment in Lotus underlines our commitment to further boost indigenously developed daily use high-quality products, to serve a broad customer spectrum at affordable prices," Isha Ambani, the executive director of Reliance Retail, was quoted as saying in the release.
The chocolate company posted sales of Rs 87 crore during the year ended March 2022, with a net profit of Rs six crore.
"We are delighted to enter into this partnership with Reliance. We have a vision to build a world-class confectionery products business across customer segments, backed by best-in-class manufacturing capabilities and talent. Our strategic partnership with Reliance, through this investment, will further enable this vision and accelerate Lotus’ transformation," Abhijit Pai, Founder-Promoter of Lotus, said.
The acquisition of Lotus Chocolate is part of Reliance Retail's goal to grow its FMCG market, which it just entered. It will pit RIL's arm against confectionery giants Britannia Industries and Nestle India.
RRVL is a subsidiary of Mukesh Ambani's Reliance Industries and serves as the holding company for all RIL retail companies.
At the annual general meeting in August 2022, RIL chairman Mukesh Ambani announced the conglomerate’s plan to enter the booming FMCG segment.