Purina Petcare's pet food division will be purchased by Nestle India for Rs 124 crore

FMCG giant Nestle announced on Thursday that it would pay Rs 123.5 crore to purchase Purina Petcare India's pet food division, giving Nestle access to the nation's quickly expanding market. Subsidiaries of the dominant Nestle S.A. company in Switzerland are Nestle India and Purina Petcare India.

The board of Nestle India "authorised the acquisition of Pet Foods Business (PFB) from Purina Petcare India through business transfer" on Thursday, according to a regulatory filing, and it would take place on October 1, 2022. 100% of Purina Petcare India and 62.76 % of Nestle India are owned by Nestle S.A.

Nestle India stated in the filing that the firm and Nestle Group had reached an agreement on a price of Rs 123.5 crore as the consideration for the purchase of PFB, which equates to around 3.4 times the revenue of Purina Petcare India for the fiscal year ending March 31, 2022.

The revenue for Purina Petcare India in 2021–2022 was Rs 36.08 crore.

Nestle India will now have access to the quickly expanding pet food market, which expanded at a compound annual growth rate (CAGR) of 39.4% from 2018 to 21 and is predicted to rise at a CAGR of 50% from 2022 to 26.

"Following the epidemic, the category has expanded to smaller towns, general retail outlets, including online shopping. There are substantial synergies upon combining PFB of Purina Petcare India into Nestle India to help unleash the full potential, with a faster rate of pet adoption as well as portfolio and town expansion chances "It read.

Additionally, it was stated that the PFB will expand its operations thanks to Nestle India's larger distribution and supply chain network, which would enable it to cover over 120 towns and speed up organised trade.