Ruchi Soya Acquires Food Business of Patanjali Ayurved

BANKING AND ECONOMY

Edible oil major ‘Ruchi Soya Industries Limited’ will acquire the ‘Patanjali Ayurved’s’ food business for around Rs. 690 crores following the completion of a Corporate Insolvency Resolution Plan in December 2019.

The acquisition is based on all the fixed assets of the food division and respective current assets on a slump sale basis. After regulatory approvals, the name will be changed to ‘Patanjali Foods Limited’. This is expected to fast-track Ruchi Soya’s shift to the Fast-Moving Consumer Goods (FMCG) category.

‘Patanjali Ayurved’ company comprises 21 products including ghee, honey, spices, juices, and flour. Ruchi Soya will pay an annual royalty to Patanjali Ayurved, estimated at 1% of the gross turnover of the products under the debt-free transfer agreement.

The board of Patanjali Ayurved has approved this transfer of the food business to Ruchi Soya Industries.

As per the acquisition, of Patanjali Ayurved’s manufacturing plant in Uttarakhand and Maharashtra, employees, assets, contracts, licenses and permits, distribution network, and customers will be transferred to the Ruchi Soya. But it excludes Patanjali’s brand, trademarks, designs, and copyrights. 

The payment of 690 crores will be made in three tranches - 15%, 42.5%, and 42.5% and this transaction is expected to be completed by July 15 of this year.

Patanjali Ayurved will retain businesses such as hair care, dental care, skincare, medicine and herbal formulations. Patanjali Ayurved transferred its biscuits business to Ruchi Soya for Rs 60 crores.

 

   Important points for the exam:

  • Edible oil major ‘Ruchi Soya Industries Limited’ will acquire the food business of ‘Patanjali Ayurved’ for around Rs 690 crores.
  • The acquisition is based on all the fixed assets of the food division and respective current assets on a slump sale basis. 
  • After regulatory approvals, the name will be changed to ‘Patanjali Foods Limited’. 
  • ‘Patanjali Ayurved’ company comprises 21 products including ghee, honey, spices, juices, and flour.
  • As per the acquisition, of Patanjali Ayurved’s manufacturing plant in Uttarakhand and Maharashtra, employees, assets, contracts, licenses and permits, distribution network, and customers will be transferred to the Ruchi Soya.
  • Patanjali Ayurved will retain businesses such as hair care, dental care, skincare, medicine, and herbal formulations.

   Facts to know:

  • Ruchi Soya is the largest manufacturer of edible oil in India.
  • Ruchi Soya was established in 1986.
  • CEO of Ruchi Soya: Mr.Sanjeev Asthana.
  • Headquarters of Ruchi Soya: Madhya Pradesh.
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