Kohinoor Foods forms JV with McCormick of US
03 Jun 2011
US spices and seasonings maker McCormick will form a joint venture with Kohinoor Foods Ltd to market and sell basmati rice and food products in India, the two companies said on Thursday.
McCormick, which sells spices, herbs, seasoning blends and sauces, will buy an 85-per cent stake in the venture, Kohinoor Speciality Foods India, for $115 million, while Kohinoor Foods will hold the remaining 15 per cent.
The deal is expected to be completed later this year once Kohinoor Foods gets the approval of its shareholders and completes other regulatory requirements. The company has sought shareholder approval through a postal ballot.
"The deal will add immense value to our business, it will improve our cash flow, reduce our bank debt and increase shareholder value," Kohinoor Foods managing director Satnam Arora told The Economic Times.
Kohinoor will transfer its undertaking relating to the business of manufacturing, processing and marketing to the venture, the company said in a filing to the Bombay Stock Exchange (BSE). It will also transfer all assets and liabilities, employees, contracts, licences and agreements to the joint venture.
The Rs907-crore Kohinoor Foods, is known for its brand of basmati rice. It also makes sauces and cooking pastes, spices, seasoning and frozen food products. Apart from India, it exports its products to markets like the US and Canada.