ITC weighs major FMCG push with potential $1.4 bn MTR, Eastern Condiments deal: Report

The proposed acquisition is in line with ITC’s strategy to strengthen its footprint in the key southern markets.

Orkla, which acquired MTR in 2007 and Eastern in 2020, had considered an IPO for its Indian businesses as recently as September 2024 but is now exploring a majority stake sale through a private transaction if it secures a better valuation, according to the report. However, the Norwegian firm has not entirely ruled out the IPO option, the report said.

A spokesperson for Orkla declined to comment on what they termed as "market speculation," while ITC has not responded to requests for comment, the report said.

For ITC, which recently acquired FMCG brand Prasuma, the potential acquisition would bolster its presence in the spices and ready-to-cook food categories. MTR Foods and Eastern Condiments dominate the markets of Andhra Pradesh, Karnataka, Tamil Nadu, and Kerala, contributing over 80% of Orkla India’s revenue of ₹2,400 crore in FY24, as per the report.

ITC Q3 results

ITC reported a 7.27% decline in its consolidated net profit to ₹5,013.16 crore for the December quarter. The company had posted a net profit of ₹5,406.52 crore in the corresponding quarter of the previous fiscal year.

Revenue from operations, however, rose 9.05% to ₹20,349.96 crore during the quarter, compared to ₹18,660.37 crore in the year-ago period. The company attributed its performance to "resilient operations amid subdued demand and rising input costs."

ITC’s board, in a meeting held last Thursday, declared an interim dividend of ₹6.50 per share for FY25. The company's revenue from the 'total FMCG' segment, which includes its cigarette business, increased 6.35% to ₹14,372.53 crore. Revenue from cigarettes alone rose 7.83% to ₹8,944.83 crore.

ITC has also expanded its presence in the frozen and ready-to-cook food space with the acquisition of Prasuma and Meatigo brands. It has signed definitive agreements to acquire a 100% stake in Prasuma over three years.

The conglomerate has also demerged its hotel business into a separate entity, ITC Hotels Ltd, which recorded its "best-ever quarterly performance" with a 14.6% growth in revenue to ₹922 crore.