Prabhat Dairy Ltd. has announced to the sale of its milk processing business to France’s Groupe Lactalis for a sum of Rs 1,700 crores. The dairy company will sell its milk processing business, which generates nearly its entire revenue, and instead, focus on developing cattle feed business and expand into areas such as animal nutrition and genetics.
According to Prabhat Dairy Ltd BSE filing, Lactalis’ India arm Tirumala Milk Products will acquire the company’s milk business as well as its step-down subsidiary Sunfresh Agro Industries. Prabhat Dairy’ milk business accounts for the company’s 98.24 per cent of consolidated revenue
The deal which is expected to be completed by the first quarter of the upcoming fiscal year will take place in two parts. Prabhat Dairy will sell its stake in Sunfresh Agro for Rs 1,227 crores whereas the company will gain Rs 473 crores for its dairy business.
The company which listed in the stock exchange on March 2015, opened more than 20 per cent higher during yesterday’s trading session. However, the stock gains eroded soon and fell by more than 30 per cent and closed about 15 per cent lower.