Buys Matale-based Diana Biscuits Manufacturers for Rs. 350 m - the second acquisition in weeks since picking up 74% stake in Kotmale Holdings for Rs. 922 m
Food industry giant Cargills Group signalled yesterday it was hungry for new businesses by acquiring Diana Biscuits Manufacturers for Rs. 350 million.
The acquisition via blue chip’s subsidiary Cargills Quality Foods Ltd., heralds the company into lucrative yet competitive biscuits market in Sri Lanka. The acquisition also comes within weeks since it bought 74% of the listed dairy specialist Kotmale Holdings from Chandra Schaffer family for Rs. 922 million.
Cargills said that Diana via its factory located in Nalanda, Matale, manufactures, markets and distributes a range of biscuits under the brand name “Helan” and “fits in well with the current portfolio of products manufactured and marketed by Cargills Group of Companies.
Cargills is of the view that the anticipated double digit economic growth in the medium term and the consequent growth in per capita income and change in lifestyle among young Sri Lankans provide vast opportunities for the FMCG business. The Company is therefore looking to further expand its businesses in line with its core business interests in retail and FMCG.
“Sri Lanka is among the highest per capita consumers of biscuits in the South Asian region. Cargills therefore sees great potential for expansion and innovation in the biscuit category,” the company said. The Group has also identified branded consumer goods to be a thrust in its future expansion and diversification. The acquisition of Diana Biscuits comes in the wake of these identified opportunities and potential for sustainable growth, Cargills added.
Since its entry into the food manufacturing business over two decades ago, Cargills has enjoyed sustained levels of growth in its FMCG businesses. All Cargills manufacturing brands, Cargills Magic, Cargills Finest, Cargills Supremo and Cargills Kist are established market leaders being responsible for driving industry growth through an innovation driven strategy. The competitive advantage of being the leader in modern trade industry through its Cargills Food City supermarket chain coupled with its island wide marketing and distribution subsidiary Millers Limited provides the ideal platform on which Cargills can nurture the potential of this newly acquired biscuit company.
Cargills also moved the stock market yesterday with 1% of its stake changing hands for Rs. 395 million which was the second highest turnover.
The blue chip saw 2.025 million shares traded between high of Rs. 197 and a low of Rs. 193 before closing at Rs. 195, up 50 cents. It was subjected to two crossings amounting 2 million shares at Rs. 195 each.
Analysts said the deal was between two institutional investors.