Conagra Divests Its Share in India's ATFL

ATFL, a leading name in India's food sector, has recently undergone a significant change in ownership, with Conagra Brands, a prominent US-based food group, selling its controlling interest. This strategic move reflects a major shift in Conagra's investment strategy and indicates a broader transformation within the global food industry.

Conagra offloaded its 51.8% stake in ATFL to two Indian investment firms, Convergent Finance and Samara Capital. Although Conagra, known for popular brands like Duncan Hines and Reddi-wip, hasn't disclosed the financial specifics of the deal, filings on the Indian stock exchange revealed the investors paid $78 million for Conagra's shares and an additional $44 million for a 26% stake from public investors.

This divestiture, expected to be finalized by the end of 2024, marks a pivotal moment for both Conagra and ATFL. For Conagra, it aligns with the company's broader business objectives and portfolio optimization strategy. Meanwhile, ATFL is set to embark on a new chapter of growth and expansion in the Indian market, where it has established a strong presence with its Sundrop brand of edible oils, among other products.

ATFL has been influential in the Indian food industry, offering a diverse portfolio that has resonated with Indian households for over three decades. This new investment is expected to broaden ATFL's distribution reach and diversify its product offerings, capitalizing on India's rapidly growing consumer class and increasing levels of discretionary income.

Harsha Raghavan, Managing Partner at Convergent Finance, praised ATFL's legacy of category-defining brands and its focus on excellence and innovation. He looks forward to leveraging India's growing consumer market to reinforce ATFL's position as a leading packaged and snack food company.

Conagra has been associated with ATFL since 1997, becoming its majority shareholder in 2011. Post-sale, ATFL will continue to have the rights to license Conagra's ACT II popcorn brand for the Indian market, ensuring continuity in its product offerings.

Manish Mehta, Managing Director and Co-Chief Investment Officer at Samara Capital, expressed optimism about the acquisition, citing ATFL's strong brand recognition among Indian consumers and plans to enhance the company's market presence by tapping into fast-growing, high-margin categories. Samara Capital aims to transform ATFL into a formidable branded food entity in India.

This acquisition signifies ATFL's strategic shift towards innovation, market expansion, and brand enhancement to thrive in India's dynamic food sector. The involvement of experienced investment firms like Convergent Finance and Samara Capital highlights the significant potential they see in ATFL, promising a bright future for the company in the Indian market.

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