Everstone Capitals together with HUL is in talks to run Modern Foods
Everstone Capitals together with HUL is in talks to run Modern Foods

Hindustan Unilever is in talk with private equity fund Everstone Capital for equity joint venture for its Modern Foods division which makes bread and rusks under the Modern brand, three people involved with the plan told Economic Times.

"HUL wants to partner with Burger King and has approached the India franchise for a possible equity partnership. Depending on how the talks progress, a complete sellout can't be ruled out," a person with direct knowledge of the development told ET.

“The deal values the bakery business anywhere between Rs 200 crore and Rs 250 crore," an investment banker with knowledge of the development said.

Modern Foods sells variety of white, brown, milk and whole grain breads along with cream rolls, fruit breads, buns, cakes, cookies and rusks. The 42-year-old brand commands more than 45 per cent of the market share.

The retailing giant has been looking to divest its stake in the bakery business for some time now. In the past, it had explored various options, including a complete sale to strategic investors.

Since HUL bought Modern Foods in 2002 from the government under the disinvestment programme, the company had been struggling with the bakery unit as high costs and an unmanageable work force in the low margin business made it unviable.

 
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