•Brands to be transferred: Dalda, Masterline, Gold Seal, Silver Seal, Marvo, Biskin and Lily.
•The proposed transfer of business will be on a slump sale basis and will include the manufacturing facility at Trichi, Tamil Nadu together with approximately 300 employees.
•Continuity of service and full production of existing terms and conditions of employees will be ensured.
•Hindustan Lever to continue distributing the products through an arrangement with Bunge for a fee.
•The deal is subject to the approval of shareholders.
Mumbai, June 20: Hindustan Lever Ltd has decided to exit the edible oils business and will be selling its one-time popular Dalda and other brands to American major Bunge Ltd.
The deal, which will fetch Hindustan Lever around Rs 90 crore, will add Rs 60 crore to the FMCG major’s bottomline.
The edible oils and fats business of Lever comprises manufacturing and marketing of vanaspati (hydrogenated fats), refined oils and bakery fats. It clocked a turnover of over Rs 350 crore last year.
According to a release issued by the company, the Lever board today signed a memorandum of understanding with Bunge for the transfer of its edible oils and fats business in India and Nepal.
HLL said the sale will involve the transfer of brands like Dalda and its various extensions, Masterline, Gold Seal, Silver Seal, Marvo, Biskin and Lily in India and Nepal.
Hindustan Lever will, however, continue to distribute the products of the business post divestment through a distribution arrangement with Bunge for a fee. The details of the distribution arrangement are still under wraps.
As a result of this arrangement, dealings with stockists and trade will remain unaffected by the proposed transaction, HLL said.
The proposed transfer of business to Bunge is structured as a going concern. The sale will include the manufacturing facility at Trichy, Tamil Nadu, together with approximately 300 employees connected to the business. The deal will ensure continuity of service and full protection to existing terms and conditions.
The FMCG major said it will seek the approval of shareholders through postal ballot. The definitive agreements are expected to be signed either in July or August after the receipt of various approvals by HLL and Bunge.
The divestment of the edible oils and fats business is in line with Lever’s focussed business strategy and rationalisation of its existing brand portfolio.
HLL will focus on value-added processed foods, a key area for growth. The company said it will seek to build and grow its portfolio of products through power brands such as Knorr, Kissan, Annapurna and Becel.
The $ 14-billion Bunge operates in the farm-to-consumer food chain with worldwide distribution capabilities.