Ruchi Soya announces acquisition of Patanjali's biscuits for Rs 60 crore

Ruchi Soya Industries has announced the acquisition of biscuits business from Patanjali Natural Biscuits Pvt Ltd (PNBPL) in a slump sale at Rs 60.02 crore.

The company, in a regulatory filing, said its Board of Directors on May 10 approved the signing of a Business Transfer Agreement (BTA) in this regard with the PNBPL.

The acquisition will be completed in the next two months, it added.

"The amount of consideration for the acquisition agreed under the BTA is Rs 60.02 crore. ...The transaction is undertaken on a slump sale basis," Ruchi Soya Industries said.

The consideration is payable in two tranches. About Rs 15 crore of the total purchase consideration will be paid on or before the closing date, while the rest Rs 45.01 crore will be paid within 90 days form the closing date, it said.

The transaction includes certain contract manufacturing agreements along with transfer of employees, assets (tangible and intangible), current assets and current liabilities, licenses and permits (excluding certain assets and liabilities of PNBPL as specified under the BTA), it said.

The objective of the acquisition is to expand the product portfolio of the existing business of the company, it added.

Ruchi Soya Industries said that this acquisition supports the company's ongoing strategy to consolidate its position as a leading FMCG player.

Ruchi and PNBPL being related parties have agreed to a Non-Compete arrangement under which PNBPL and its respective affiliates including Patanjali Ayurved Limited cannot enter into any competing business of biscuits in India directly or indirectly, it added.

The turnover of the PNBPL was Rs 448 crore in 2019-20.

Baba Ramdev, co-founded the Patanjali Ayurved Ltd. with his colleague Balkrishna. He has more recently become a vocal advocate on Indian political issues.

The company has also been accused of misleading advertisements about its products and flimsy testing before being launched to market.[34] Some products like amla juice,[35][36] and ayurvedic medicines.

Patanjali has also been surrounded in controversies regarding working conditions where Ramdev and Acharya Balkrishna are treated at gurus whose feet must be touched each time they enter an area.

In June 2020, Patanjali Ayurved announced a drug named Coronil for COVID-19 treatment. Ramdev, by organizing press conference regarding same matter had claimed that Coronil has cured Covid-19 patients.

The Indian government has allowed Patanjali Ayurved to market Coronil as an immunity booster but not a cure; also banning it from selling as Covid-19's cure. The Government of Maharashtra has banned the sale of Coronil in the state.