Mumbai, Jan. 16: The Murugappa group is exiting the confectionery business by selling its 60.39 per cent stake in Parry’s Confectionery to Lotte Confectionery Company of Korea at Rs 283.12 per share.

While Rs 64 crore is expected to flow to the Murugappa group, Lotte Confectionery will also announce an open offer to the shareholders of Parry’s to mop up 20 per cent of their stake. Lotte will, therefore, have to shell out around Rs 108 crore.

Parry’s Confectionery today informed the stock exchanges that its promoter Murugappa group, represented by EID Parry India, “has indicated their intention to divest their holding in the company in favour of Lotte”.

Parry’s added that it has entered into a tripartite agreement with EID Parry India and Lotte in order to facilitate the divestment of over 60 per cent held by the promoter group.

“We believe the selling is in the best interests of the company and its stake holders,” said M. V. Subbiah, Parry’s Confectionery chairman.

Parry’s Confectionery, which is part of the Rs 4,200-crore Murugappa group, commenced operations in 1914 from a unit in Tamil Nadu and later consolidated its presence to emerge as the country’s largest manufacturer of sugar boiled confectionery. For the second quarter of the current year ended September 30, the company posted sales close to Rs 25 crore.

Last year in Parry’s embarked on a financial reorganisation by dipping into the share premium account to clean up the balance sheet. The news led to the in Parry’s scrip hitting a 52-week high of Rs 265.80, after which it finished lower at Rs 241.30.

The agreement will become effective after getting relevant government approval, which is expected to take three to four months. Till such time the payment is received there would be no change in the board of directors of the company, sources said, adding that even after a full takeover by Lotte, a member of the Murugappa group would be on the board.