In the first week of January 2014, Europe’s biggest dairy company Groupe Lactalis SA agreed to acquire a controlling stake in India’s Tirumala Milk Products for between US$ 250 million and US$ 300 million (approximately `1,500 to 1,800 crore) according to several Indian business dailies. Lactalis, based in France’s Loire Valley, will buy shares from Hyderabad-based Tirumala’s founders, who own 80% of the company, and from private equity firm the Carlyle Group, which invested about US$ 22 million in the company in 2011 and holds the remaining 20%.
The deal will help Lactalis reduce its dependence on Europe, where it gets 60% of its revenue. India is the world’s biggest milk producer and most of its produce stays at home as a protein staple for its population. The country’s milk product exports are tiny and restricted mainly to south Asian countries. Tirumala’s sales for the financial year ending March 2013 rose 21% to `1,424 crore, according to its website. It had net income of `70 crore in the year. “The company has seven plants across South India, and Lactalis will help expand the company in both North and South India,” said Danda Brahmanandam, Tirumala’s founder and managing director as reported in business daily Mint.
Family-run Lactalis, owner of the Galbani, Lactel and President brands, is Europe’s number one dairy group in terms of revenue. It has grown through acquisitions to reach annual revenues of 15.7 billion Euros, of which Europe accounts for 60%. One of its recent high-profile acquisitions was Italy’s Parmalat group in 2012. According to data compiled by
Bloomberg, foreign companies announced US$ 15.6 billion of acquisitions in India last year, up from US$ 11 billion in 2012.
