Food and Beverage Business

Conagra Brands divests ownership in India’s Agro Tech Foods

Conagra Brands divests ownership in India's Agro Tech Foods Conagra Brands Food and Beverage Business

Conagra Brands has recently announced the sale of its controlling stake in India’s Agro Tech Foods (ATFL) to local investment businesses Convergent Finance and Samara Capital.

The US food group, known for brands such as Duncan Hines and Reddi-wip, has offloaded its 51.8% shareholding in ATFL. The transaction is set to be completed by the end of calendar year 2024. However, financial details of the deal have not been disclosed by Conagra.

According to a stock-exchange filing issued in India by ATFL, the investors will pay a combined $78m for Conagra’s shareholding and $44m for another 26% stake held by public investors. ATFL, a publicly-listed company, boasts a portfolio of brands including Sundrop edible oils.

Harsha Raghavan, managing partner at Convergent Finance, commented on the deal, stating, “Agro Tech Foods’ category-defining brands have been beloved household names for the past three decades…we will expand ATFL’s distribution reach and product range, transforming it into the country’s leading packaged and snack food platform.”

Manish Mehta, managing director and co-chief investment officer at Samara Capital, added, “We are delighted to lead the acquisition of a majority stake in ATFL. The company’s brands have high recall value with India’s consumers…we aim to increase ATFL’s presence in fast-growing, high-margin categories.”

In January, Conagra Brands revised its sales and profit guidance for the year after disappointing second-quarter results. The company expects a 1-2% decline in annual net sales on an organic basis. This adjustment is due to lower consumer demand impacting volume recovery.

Despite the challenges, Conagra remains focused on building momentum and aiming for volume growth as they approach fiscal 2025. President and CEO Sean Connolly emphasized the importance of delivering results steadily and without making risky decisions.

Overall, the sale of Conagra’s stake in ATFL marks a strategic move in the food and beverage industry landscape, allowing the company to reposition itself for future growth opportunities.

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