– PepsiCo is in discussions to acquire a minority stake in Haldiram Snacks. – Competing with Temasek and Alpha Wave Global, who have made early offers. – Haldiram seeks valuation of Rs 85,000-90,000 crore. – Indian snacks market projected to grow from Rs 42,695 crore (2023) to Rs 95,522 crore (2032). – Analysts suggest Haldiram might aim for higher valuations or majority sale.
PepsiCo has recently entered the competitive arena to acquire a minority stake in Haldiram Snacks, esteemed as India’s leading ethnic snacks manufacturer. The Economic Times reports that PepsiCo is contending against significant players such as Temasek and Alpha Wave Global, which have already made substantial offers for a 10-15 percent stake last December. Discussions have commenced between PepsiCo executives from New York and the Agarwal family, the founders of Haldiram, though these talks remain preliminary.
The Agarwal family seeks a valuation ranging from Rs 85,000 to 90,000 crore, indicating Haldiram’s first consideration of external investment. PepsiCo, well-known for brands like Lay’s, Kurkure, and Doritos, faces stiff competition in the Indian snacks market from regional players and listed companies, which has led to a decline in its market share. Absent in the ethnic snack segment, a partnership with Haldiram could significantly enhance PepsiCo’s distribution capacity and market presence.
Jagrut Kotecha, PepsiCo’s head for India, has been specifically tasked with fortifying the snacks division. This strategy aligns with PepsiCo’s renewed emphasis on its snacks sector, especially as their beverage operation is primarily managed by Varun Beverages Ltd. Previous acquisitions, including Uncle Chipps and the launch of Doritos nachos, underscore the company’s intent to expand its snacks offerings.
Despite interest from PepsiCo, analysts suggest that Haldiram may aim for either a premium valuation or a sale of a majority stake. Historical discussions with companies like Mondelez and Kellogg’s have yet to yield satisfactory agreements. Presently, Temasek appears to be the frontrunner for a minority stake with a valuation exceeding $1 billion, while competitive bids from Blackstone and Alpha Wave Global further complicate the landscape.
The Indian snacks market, estimated at Rs 42,695 crore in 2023, is anticipated to expand to Rs 95,522 crore by 2032, according to the IMARC Group. This rapid growth underscores the strategic significance of securing a partnership with Haldiram for major stakeholders.
PepsiCo’s quest for a minority stake in Haldiram marks a significant attempt to strengthen its position in India’s ethnic snacks market amidst intense competition. As valuations rise and various contenders vie for the Agarwal family’s approval, the outcome will likely influence the future dynamics of the Indian snacks industry. Ultimately, the strategic partnership could either bolster PepsiCo’s distribution network or lead Haldiram to further capitalize on its valuation ambitions.
Original Source: www.business-standard.com
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