Tata Consumer Products Limited (NSEI:TATACONSUM) is in advanced discussions to acquire Danone S.A. (ENXTPA:BN)'s India nutraceuticals and specialised nutrition portfolio, according to people familiar with the matter, part of its push in the fast-growing wellness and nutrition market. Negotiations taking place over the past few months gained momentum recently, one of the persons said. Both sides are said to be close to agreeing on valuation.
An acquisition would give the maker of Tata Tea entry into the value-added nutrition segment, where it will compete with Nestlé and Abbott. TCPL has been building a broader wellness ecosystem, largely through acquisitions such as Soulfull, Capital Foods and Organic India, as well as expanding into protein-rich foods, organic staples and functional beverages. The company has been on the prowl for acquisitions for several years to enter segments beyond core staples and tea, said Abneesh Roy, executive director at brokerage Nuvama Institutional Equities.
"But cracking the nutraceuticals and infant nutrition space won't be easy. While the Tata name adds trust in sensitive categories like infant nutrition, the segment is highly regulated and has stronger rivals like Nestlé," he said. "Protein has emerged as one of the hottest battlegrounds across FMCG, with almost every major player entering the segment." Danone and TCPL did not respond to queries.
