Britannia says Cheese. Brings in partner into the business

Britannia has entered into a JV with Bel SA, France (Bel) to undertake the development, manufacturing, marketing, distribution, trading and selling, etc., of cheese products in India and certain other countries.

Bel Group is a world leader in branded cheese and a significant player in the healthy snacking segment with brands like The Laughing Cow, Kiri, Babybel, Boursin and Nurishh, with sales of 3.38 billion euros in the calendar year 2021.

Key points related to the JV agreement –

  1. Britannia is selling 49% of it’s stake in its wholly owned subsidiary, Britannia Dairy Private Limited (BDPL), to Bel for a consideration of Rs 262 crore
    • Transaction values BDPL at Rs 534.7 cr
    • BDPL’s FY 21-22 turnover was Rs 340 crore
    • Therefore Value to Sales is 1.6x, which is surely on a very low side for this kind of a business
  2. Both partners are further infusing new equity of Rs 421.4 crore into BDPL in their respective shareholding of 51% and 49% respectively.
    • Britannia – Rs 214.9 cr
    • Bel – Rs 206.5 cr
  3. The products will be co-branded using the trademarks Britannia and The Laughing Cow.
  4. BDPL will be renamed to Britannia Bel Foods Private Limited.

The subject JV seems to be a step in right direction to capitalise upon the exciting prospects of cheese. The domestic cheese market is estimated at over Rs 4,000 crore and is currently led by Amul, Britannia, Mother Dairy and Govardhan.

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