MUMBAI: Hindustan Unilever will sell its bread and bakery business under the Modern brand to Nimman Foods Private Ltd, a company backed by the Everstone Group, for an undisclosed amount, as part of its strategy to exit non-core businesses.
The deal includes the sale and transfer of the brand and business, which owns six operating manufacturing units and a network of franchisees across India.
“Modern is an iconic brand which has been delighting consumers over the years through its range of high-quality bread and value-added bakery products. Since its acquisition in 2000,
has strengthened the Modern business, driven consistent topline growth and significantly improved profitability. Having turned around the business and built a sustainable growth model, we believe that the sale to Everstone will unlock the full potential of the Modern brand,” said Sanjiv Mehta, CEO and Managing Director of HUL.
The Everstone Group is a Singapore-based venture capital and private equity firm that manages about $2.5 billion of assets. Everstone jointly owns the Indian franchise of US hamburger restaurant chain Burger King.
HUL’s bread and bakery business consists of a full range of white and sweet bread, health and wellness bread and value added bakery products such as cakes, muffins, buns, pavs and cream rolls under the Modern brand name. The 42-year-old brand commands a market share of more than 45%.
Since HUL bought Modern Foods in 2002 from the government, the company had been struggling with the bakery unit amid high costs and an unmanageable workforce in the low-margin business.