The size of the business that includes manufacturing facilities is estimated to be around Rs 250 crore (Rs 2.5 billion). The deal had already been sealed, sources close to the developments said.
Temptation Foods, the Rs 39-crore (Rs 390-million), listed, fruit and vegetables export company, will get direct access to HUL's customers across the world.
HUL's marine foods division is the largest single export vertical in the country. HUL had decided to sell it as it wanted to get out of all non-core businesses.The company had already sold its seafood processing plant in Andhra Pradesh and shut down operations in Gujarat.
"HUL's marine foods division buy would enable Temptation Foods to position itself with high-end branded food in the frozen space at a time when retail majors are making entry into India. HUL has strong presence in Europe, Japan and the US. This will give Temptation Foods a direct entry into these markets," analysts pointed out.
Recently, HUL also expanded its customer base in Europe and West Asia and developed
new markets in Mexico. HUL's marine products that are exported include surimi crabsticks, crabclaws, crab chunks, fish fillets, crab, octopus and squids. HUL has manufacturing facilities in Chorwad in Gujarat, Kuthiathode and Aroor in Kerala. The company has also added several new products such as skin pack shrimps, marinated seafood and minced crabsticks to its seafood portfolio.
Temptation Foods CEO Raj Halve declined to comment, adding, "As a policy, we do not comment on market rumours." HUL executives were unavailable for comment. The estimated size of the domestic marine foods market is $2.5 billion and the government is planning to double it in the next three years. Temptation Foods had recently acquired 100 per cent stake in Karen's Gourmet Kitchen, a foods brand managed by leading foodie Karen Anand.
The KGK acquisition enabled Temptation to enter the high-end branded processed food products market.
Temptation Foods has just launched frozen chopped vegetables under its own brands, Delika and Temptation, which would cater to different price segments of the market.