INDIA – The Competition Commission of India (CCI) has approved the acquisition of certain equity share capital of LT Foods Limited by SALIC International Investment Corporation (SIIC) under the relevant section of the Competition Act, 2002.
Last year in November, LT Foods said it has raised nearly Rs 390 crore (US$47M) by selling shares to Saudi Agricultural and Livestock Investment Company (SALIC) through private placement.
LT Foods Limited (LT Foods) is a 70-year-old consumer food company engaged in the specialty rice-based foods business across the globe and is the owner of Daawat Foods Limited (DFL).
In November 2022, the board of directors of LT Foods approved the preferential issuance of 27,408,164 equity shares accounting for a 7.89% equity stake in LT Foods at ₹142.23 (US$1.72) per share to SALIC. In addition, SALIC will acquire a 1.33% equity stake through a secondary share purchase from the promoters’ group, LT Foods added.
According to the statement by the commission, the approval of the acquisition of equity share capital of LT Foods Limited by SALIC International Investment Corporation is under Section 31(1) of the Competition Act, 2002.
The Act allows deals beyond a certain threshold to be approved by CCI, which keeps a tab on unfair business practices as well as promotes fair competition in the marketplace.
Upon completion of the transaction, SALIC will hold a 9.22% stake in LT Foods, while the promoters will continue to hold the majority equity stake of 51%, it added.
LT Foods had said that this transaction would reflect a successful collaboration and partnership between LT Foods and SALIC as the equity injection would accelerate LT Foods’ organic and inorganic expansion plans across business segments.
It will also give a boost to its future growth plans specifically in the Middle East and Saudi Arabia region and fortify its position as one of the leading players in the industry.
On the other hand, the deal would enable SALIC to have greater exposure to the Specialty Rice sector and secure larger quantities of Specialty Basmati Rice for the Kingdom of Saudi Arabia.
The LT Foods company reported a 30% rise in net profit to Rs 100 crore ( US$12M) on a 31% increase in total revenue to Rs 1,792 crore ( US$216,343) in Q3 FY23 over Q3 FY22.
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