Marico–PVR INOX Deal: Marico to Buy Majority Stake in 4700BC for INR 226.8 Crore

A final deal has been reached for Marico to purchase PVR INOX's 93.27% share in Zea Maize Private Limited (ZMPL). The gourmet popcorn brand 4700BC is owned by ZMPL. The entire consideration of INR 226.8 crore has been finalised in an all-cash transaction. According to Marico's stock exchange filing, the deal should be finalised within 30 days. In the exchange filing, the FMCG major also stated that the business is entitled to purchase the remaining Zea Maize shares. 

This will occur when three years have passed from the execution date, at a consideration that will be decided at that point. These factors include meeting specific deadlines, obtaining necessary clearances, and adhering to the terms and conditions of the final agreements.

4700BC Expanded its Business Profile Under PVR INOX        

Over a decade ago, PVR INOX made an investment in the brand. 4700 BC has now moved into its next stage of development. In its announcement, the movie theatre chain said that 4700BC has to focus more on FMCG, attract a wider audience, and launch new products more quickly. PVR INOX's chief financial officer, Gaurav Sharma, told Business Standard that the company has developed a robust multichannel presence over the years, encompassing institutional, digital, and modern retail.

This company has effectively expanded beyond movie theatres to become an FMCG brand. He went on to say that the brand has grown to the point where other FMCG capabilities, such as a broad distribution network and the ability to expand its product line, are necessary for the next stage of growth. According to Sharma, PVR INOX believes it has contributed to the brand's development, and at this point, a major FMCG platform like Marico is better able to promote the brand. He added that the deal offers the corporation a chance to generate shareholder value and the timely monetisation of a non-core asset. According to Sharma, PVR INOX would invest in its primary business of movie theatres and pay down its debt with the sale's revenues.

How Deal will Benefit 4700BC?

In a press release, Marico's managing director and CEO, Saugata Gupta, stated that the investment in 4700BC is in line with the company's goal of entering rapidly expanding food sectors with unique, cutting-edge brands. It believes that 4700BC has enormous potential as a high-end snacking brand with a strong customer base and track record of success.

Together, the two companies will take advantage of our current food scale to increase the brand's visibility across channels while adhering to its customer-first philosophy and utilising its exceptional innovation skills. For this transaction, Shardul Amarchand Mangaldas & Co. served as PVR INOX's legal adviser, and Axis Capital served as its only financial advisor.