Bikaji Foods shares settle in the red after board nod for acquisition of 55% stake in Ariba Foods

Bikaji Foods will be acquiring 55% stake for ₹60.49 crore in Ariba Foods, which is an Indore-based manufacturer of frozen food items. The acquisition is expected to be completed in 90 days, as per a regulatory filing.

Pursuant to the subscription of 55% of shareholding by Bikaji Foods, Ariba Foods will become a subsidiary of the company, the filing added.

"The business of the Ariba Foods is not outside the main line of business of the company. This acquisition will enhance Bikaji Food's backward integration and securing control over the supply of frozen food," it further stated.

The announcement related to the acquisition, at around 1:40 pm, did not lead to a surge in Bikaji Food's shares. The stock closed in the red, last trading at ₹854.60, down 0.05%.

According to Bikaji Foods, the acquisition of Ariba Foods is part of the overall strategy to develop and expand frozen snacks and sweets business in India and abroad.

The company will partly shift its current frozen snacks and savories manufacturing to Ariba Foods’ manufacturing facility located in Ujjain, Madhya Pradesh. "This strategic decision will also strengthen our Quick Service Restaurant (QSR) business by integrating comprehensive back end operational support from Ariba Foods," it added.