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Aug, 04 2018

Tata, Dabur among bidders for Kraft Heinz's Complan brand

Tata Group, India’s biggest conglomerate, and Dabur India Ltd., the $11.3 billion consumer-goods company, are among suitors selected for the second round of bidding.

Kraft Heinz Co. has cut down the number of bidders for a portfolio of Indian businesses it’s selling that includes the children’s milk drink Complan, people with knowledge of the matter said.

India’s biggest conglomerate,Tata Group and Dabur India Ltd., the $11.3 billion consumer-goods company, are among suitors selected for the second round of bidding, according to the people. The sale has also drawn interest from an arm of Cadila Healthcare Ltd. and other potential buyers, the people said, asking not to be identified because the information is private.

Kraft Heinz has been seeking about $1 billion for the assets, the people said. Besides Complan, the selling Indian business products include the Glucon D instant energy drink, Nycil talcum powder and Sampriti clarified butter, the people said.

Kraft Heinz extended gains in New York trading Friday, rising 5.9 percent to $62.90 at 9:54 a.m. after earlier touching $63.04. That’s the biggest intraday jump since May.

Tata Group is considering doing any potential deal through listed unit Tata Global Beverages Ltd., according to one of the people. Spokesmen for Tata Group, Dabur and Tata Global Beverages declined to comment. Representatives for Kraft Heinz and Cadila didn’t immediately respond to requests for comment.

Any transaction would add to the $11.9 billion of acquisitions targeting the Indian consumer industry this year, data compiled by Bloomberg show. Kraft Heinz is bringing Complan to market as U.K. pharmaceutical firm GlaxoSmithKline Plc weighs selling its stake in its Indian consumer health subsidiary, which owns malted milk brand Horlicks.

One of the persons in the know of the matter said, "The price sought by Kraft Heinz translates into more than 20 times earnings before interest, taxes, depreciation and amortization. Some potential bidders have balked at the valuation, due to what they see as lower growth prospects for certain products amid changing consumer tastes in India, the people said.

There’s no confirmation of suitors to proceed with binding offers, and Kraft Heinz could decide to keep the business, according to the people.

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