Hindustan Unilever Limited (HUL) has entered into an agreement for the sale and transfer of its bread and bakery unit, which functions under the name of Modern to Nimman Foods for an undisclosed amount.
Nimman Foods is an investee company of the Everstone Group.
Everstone Group is a Singapore-based venture capital and private equity firm which focuses on asset management.
HUL has decided to offload its bread and bakery business in order to concentrate better on its core packaged food businesses.
The deal is subject to regulatory approvals and other obligatory clearances.
HUL and Nimman will work together to secure the necessary approvals to complete the deal in the next couple of months. Until the transaction is complete, HUL will continue to manage the operations of the bakery business.
The company's bread and bakery business consists of a full range of white and sweet breads, health breads, and other value added bakery products like cakes, muffins, buns, pavs, cream rolls, all of which function under the brand Modern. Currently, the business has six operative manufacturing units and a large network of franchises across India.
Since HUL took over Modern Foods in 2002 from the government, it has been struggling with the bakery unit with high costs in the low-margin business.
