ITC Ltd is in preliminary discussions with Norway’s Orkla ASA to acquire its Indian subsidiaries, MTR Foods Pvt. Ltd and Eastern Condiments Pvt. Ltd, for approximately $1.4 billion. This move is part of ITC’s strategy to enhance its presence in southern markets. The potential stake sale marks a shift in Orkla’s plans, which had been considering an IPO for its Indian operations as recently as September 2024. Orkla entered the Indian market by acquiring MTR in 2007 and Eastern in 2020.
ITC is interested in this acquisition as it aims to boost its offerings in the food sector, particularly in spices and edibles. However, Orkla has not completely abandoned the IPO option; if the private sale does not yield a favorable valuation, the company may still pursue an IPO in India.
MTR Foods and Eastern are leaders in the ready-to-cook and spice markets in Andhra Pradesh, Karnataka, Tamil Nadu, and Kerala. MTR Foods, established in 1950 by the Maiya family, has evolved into a significant player in the South Indian food market. In fiscal 2024, Orkla India generated over 80% of its revenue, exceeding ₹2,400 crore, from these two brands. MTR Foods also exports a variety of products to North America, West Asia, Japan, and several Southeast Asian countries, with its South Indian product range being particularly popular in international markets.