French company Lactalis agrees to buy Indian dairy producer

Groupe Lactalis, the maker of President brand cheeses, has agreed to buy Indian dairy producer Tirumala Milk Products from Carlyle Group LP and its owners, in its first acquisition in the South Asian nation.

Lactalis, based in France’s Loire Valley, will take over 100% of the Indian company and retain the existing management, spokesman Michel Nalet said. Nalet declined to comment on the terms of the deal. Carlyle, the world’s second-biggest buyout firm, invested €16m in the Indian company in 2010.

The deal will help Lactalis reduce its reliance on Europe, where it gets 60% of its revenue. Foreign companies announced €11.5bn of acquisitions in India last year, up from €8bn in 2012, according to data Bloomberg compiled.

“India is an important place of opportunity for the development of the group worldwide,” Nalet said.

“With the size of Tirumala today we think we have a good opportunity for the development of the Indian dairy market.”

India was the No 3 producer of fluid cow’s milk in the world in 2013, behind the European Union and US, according to the US Department of Agriculture.

Hyderabad-based Tirumala’s sales for the year ended March 2013 rose 21% to 14.24 billion rupees (€168m), according to its website. It had net income of 700 million rupees (€8.3m) in the year. The company has seven plants across south India, and Lactalis will help expand the company in both north and south India, said Danda Brahmanandam, Tirumala’s founder and managing director.

Carlyle had invested around €800m in India as of Sept 30, according to a December statement. Carlyle will invest in strong owner driven companies in sectors including consumer, healthcare, technology and engineering services, said Carlyle India managing director Shankar Narayanan.

— Bloomberg