Unilever buys Rosell for Rs 113 cr

"In the event of any shares tendered in excess of 74 per cent, that is up to 26 per cent, it will be acquired by HLL or its subsidiaries in India…," it said. Rossell Industries Ltd has tea gardens in India’s North-Eastern state of Assam, it said.

Any shares tendered in excess of 74 per cent will be acquired by HLL, the Indian subsidiary of Unilever. The company said that these agreements are subject to FIPB and FERA approval.“HLL will act in concert with Unilever in respect of the Open Tender Offer,” it added.

The deal will lead to an increase in overall tea output for HLL in India to about 27,000 tonnes. While HLL’s current capacity is 20,000 tonnes, that of Rossel Industries is 7,062 tonne of tea. The seven tea gardens of Rossel Industries are located in Assam with a planted area of 3,171 ha. About 20 per cent of the tea output is currently being exported.

An HLL spokesperson said that the deal will benefit the company as it will have at its disposal additional capacity of premium teas with an export potential. “If HLL was to make the acquisition, there would be a substantial forex outgo. Further, it would take a long time to accomplish the deal due to various permissions required,” the spokesperson said. “We plan to further increase exports of the high quality tea from the Rossel gardens,” he added. The company’s tea is exported to countries like UK, Germany, Russia, Iran and the Middle-East.

The deal has beenstruck at Rs 250 per kg, which is at a 15 per cent premium to the regular price. The Unilever group had earlier stated that it was in serious discussions with the resident and non-resident promoters of the Calcutta-based tea company (Rossell Industries) to acquire a controlling interest.

The equity base of Rossell Industries is Rs 10.12 crore. Of this, FIIs hold 36.56 per cent while financial institutions have a holding of 12.83 per cent and directors and relatives hold 2.25 per cent. Recent rumours of the deal led to the doubling of the stock price of the YK Modi-controlled company in the last one month.

Rossell Industries’ main business of tea gardens and tea brands yielded a turnover of Rs 75.79 crore. Rossell Industries posted a net profit of Rs 5.81 crore in December ended 1997-98.