CCI Approves Acquisition of 72.89% Voting Share Capital in Prataap Snacks by Authum Investment and Mahi Madhusudan Kela

The CCI’s approval underscores the transaction’s compliance with competition laws, ensuring that it does not adversely impact the snack food industry or consumer interests.

The Competition Commission of India (CCI) has given its nod to the proposed acquisition of 72.89% of the voting share capital in Prataap Snacks Limited by Authum Investment & Infrastructure Limited and Ms. Mahi Madhusudan Kela. This marks a significant shift in ownership, with both acquiring entities becoming prominent stakeholders in the snack food company known for its "Yellow Diamond" and "Avadh" brands. The transaction involves two key stages:

Direct Equity Acquisition:

Authum Investment & Infrastructure Limited (Acquirer No. 1): Acquires 42.33% of Prataap Snacks' voting share capital via a Share Purchase Agreement (SPA) with sellers, including Peak XV Partners Growth Investment Holdings I, Peak XV Partners Growth Investments II, and Sequoia Capital GFIV Mauritius Investments.

Mahi Madhusudan Kela (Acquirer No. 2): Acquires 4.54% of the voting share capital from the same sellers.

Public Open Offer:

Authum and Ms. Kela launched an Open Offer to acquire an additional 26.01% voting share capital from public shareholders, collectively aiming for control over 72.89% of the target company.

Following the transaction:

Authum Investment & Infrastructure Limited will become the new promoter of Prataap Snacks Limited.

Mahi Madhusudan Kela will join the promoter group.

The sellers under the SPA will exit the promoter and promoter group categories.

Background on Key Entities

Authum Investment & Infrastructure Limited (Acquirer No. 1):

A Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India, Authum specializes in:

Long-term equity investments in both listed and unlisted companies.

Real estate investments.

Lending and structured credit solutions.

An affiliate, ADF Foods Limited, is engaged in manufacturing and distributing processed ready-to-eat frozen foods, enhancing Authum’s portfolio in the consumer goods segment.

Prataap Snacks Limited (Target):

Incorporated in 2009, Prataap Snacks is a key player in the Indian snack food industry. Its extensive portfolio includes extruded snacks, potato chips, and other snack products under popular brands such as Yellow Diamond and Avadh.

Strategic Implications of the Transaction

Growth Opportunities: The transaction positions Authum and Ms. Kela to influence the strategic direction of Prataap Snacks, leveraging its market presence and established brands to expand operations.

Focus on Value Addition: With Authum’s expertise in structured investments and credit solutions, the company is well-placed to provide financial and operational efficiency, while aligning with emerging market trends.

Shift in Promoter Dynamics: This acquisition highlights a significant realignment, with existing promoters exiting the company and new stakeholders assuming leadership.

CCI’s Approval Significance

The CCI’s approval underscores the transaction’s compliance with competition laws, ensuring that it does not adversely impact the snack food industry or consumer interests. This acquisition is expected to foster innovation, enhance market competitiveness, and benefit consumers with an expanded range of products.

With this strategic acquisition, Prataap Snacks is set to embark on a new chapter of growth and market consolidation under its revamped ownership structure.