PepsiCo’s big bet for Haldiram, enters into race for Rs 900000000000 valuation, huge challenge for Temasek and…

If PepsiCo becomes successful in securing a stake in Haldiram represents an opportunity to expand its portfolio in one of its key growth markets.

Written by: Anirudha Yerunkar Edited by: Anirudha Yerunkar

Published: January 15, 2025, 4:18 PM IST

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https://www.india.com/business/pepsicos-big-bet-for-haldiram-enters-into-race-for-rs-900000000000-valuation-huge-challenge-for-temasek-and-alpha-wave-global-7540583/ Copy

Haldiram Snacks, India’s leading ethnic snacks manufacturer, has attracted significant investor interest with its Rs 90,000 crore valuation. Among the prominent contenders vying for a minority stake are PepsiCo, Temasek, and Alpha Wave Global, as reported by The Economic Times.

Competition For Haldiram’s Minority Stake

PepsiCo, known for its global snack and beverage brands, has entered the competition alongside Temasek and Alpha Wave Global, which have already advanced their negotiations with the Agarwal family, founders of Haldiram. Offers for a 10-15% stake were reportedly made by these contenders in December 2024.

Executives from PepsiCo’s New York headquarters have engaged in preliminary discussions with the Agarwal family in recent weeks. The potential transaction is expected to be funded primarily by PepsiCo’s US parent, while its Indian division will play a lesser role.

This marks the first time Haldiram is considering bringing on an external investor, with the family seeking a valuation between ₹85,000 crore and Rs 90,000 crore.

PepsiCo’s Strategic Move For Haldiram Stake

PepsiCo’s interest in Haldiram is tied to its challenges in India’s competitive snacks market, where regional players like Bikanerwala, Balaji, Bikaji Foods, Gopal Snacks, and Prataap Snacks have eaten into its market share.

While PepsiCo leads the western snacks segment with a 24% market share, it lags in ethnic snacks like namkeen and bhujiya. A partnership with Haldiram could give PepsiCo access to a vast distribution network and bolster its presence in this high-growth segment.

PepsiCo India’s head, Jagrut Kotecha, was appointed to revitalize the company’s snacks business, aligning with this strategic push. PepsiCo has a history of acquisitions in India, including its Uncle Chipps purchase in 2000 and the launch of Doritos in 2016-17.

Haldiram’s Potential Strategy

Despite the interest, analysts speculate that Haldiram may demand a premium or consider selling a majority stake instead of a minority one. Previous discussions with companies like Mondelez, Kellogg’s, and Tata Consumer have failed to materialize, signaling the Agarwal family’s inclination to hold out for higher valuations.

Currently, Temasek is leading discussions for a minority stake with a valuation exceeding $1 billion, while rival bids from entities like Blackstone and Alpha Wave Global intensify the competition.

As negotiations continue, the outcome could significantly reshape the dynamics of India’s snacks industry.