Acquisition of the Snack Business by Blackstone
Blackstone, one of the largest private equity funds globally, has recently made the offer of accruing the snack business of 87-year-old Indian business Haldiram along with its partner Abu Dhabi Investment Authority (ADIA) and GIC of Singapore. Blackstone and its partners have made a non-binding offer to purchase 74-76 % of this company (Haldiram Snacks Food Pvt Ltd) at an astonishing valuation of 8-8.5 billion dollars, which translates into nearly 70,500 crore Rupees. It needs to be mentioned that the restaurant business of Haldiram, which is valued at around Rs 1800 crore, is not included in this offer.
If this offer is materialized, it will be the most prominent private equity buyout in the history of India and that too in the snack business. However, the current CEO of Haldiram, KK Chutani, has not commented on this offer. Now, the question remains: why the largest PE company is suddenly interested in the food business when most of its past acquisition is concentrated in the technology sector? The Indian snack business market is currently valued at 1.29 billion dollars, and it is expected to grow at a CAGR of 14.33 % between the period of 2024 to 2029.
Blackstone aims to take part in this growth trend while diversifying their investment portfolio; acquiring the snack business of Haldiram is the first step in capitalizing on this market opportunity. In India, Haldiram is a household name, so for accruing their brand name, the offer of 8 billion dollars is justified. This is not the first time a foreign firm has shown interest in acquiring the business of Haldiram because, in the past, companies like Bain Capital, Warburg Pincus, and General Atlantic have tried. Only time will tell if Haldiram accepts this offer or not.
The need to get into the Snack Business
Not only have foreign brands not shown interest in Haldiram Snacks Food Pvt Ltd’s offer because back in September 2023, one of the biggest business houses of India, but also Tata Group tried to acquire a 51% stake in this business. This deal can easily make Tata Consumer Products the market leader in the Indian FMCG market, so a valuation of 10 billion dollars (83,300 crores) was offered, which is around ten times its annual revenue of 1.5 billion dollars.  However, the owners of the business are not showing any interest in selling their business despite all the astonishing valuations.
The Brand and its Market
Haldiram have a strong manufacturing and distribution network in India, they have factories in Nagpur, New Delhi and Noida. In 2016, Haldiram established its first manufacturing firms in the UK to export its products to the US, Australia and New Zealand. This company have a widespread network of 1000 distributors in India, and its products are available in more than 7 million outlets. There are rumours that Haldiram is considering listing the business in the Indian stock market with an Initial Public Offering (IPO) to raise around 2500 crore Rupees to expand their production capability within the next five years.
In 1937, Haldiram was a local retail sweet and snack shop in Bikaner, Rajasthan; within a decade, it became a world-renowned company which is known for its traditional Indian snacks. Due to the immense growth potential, multiple national and international companies are trying to purchase a stake in the business, but it looks like the owners of this iconic business do not want to lose their decision-making authority. In the future, Haldiram will continue to receive such offers, but there is little or no chance that this brand will agree to sell the stake in the business, which has become the synonym of India’s traditional snacks.         Â
