Shares of Prabhat Dairy surged 20 percent on Tuesday, hitting an opening high of Rs 111.65.
The micro-cap FMCG stock rose after global dairy major Lactalis's Indian subsidiary Tirumala Milk Products said that it would acquire Prabhat’s dairy business for Rs 1,700 crore. This will be Lactalis's third acquisition in India.
The deal still requires regulatory approvals and may take about six months to complete although there has been no official word on the timeline for completion of the deal.
Kotak Mahindra Capital is the financial advisor to Prabhat on the deal, while Veritas acted as the legal advisor, according to a Business Standard report.
In addition to dairy business, the transaction also involves sale of 100 percent shareholding in Sunfresh Agro Industries, a step-down-subsidiary of Prabhat, via a share purchase agreement, the report added.
Prabhat will now focus on its cattle field and animal genetics business, the BS report further added.
At 11 am, shares of Prabhat Dairy were quoted at Rs 100.25, up 7.74 percent, but more than 12 percent down from its day's high. So far, over 46 lakh shares traded on the NSE.
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First Published: Jan 22, 2019 11:24 AM IST
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