Dairy company Heritage Foods Ltd on Friday said its board has approved the merger of its wholly-owned subsidiary, Heritage Novandie Foods, with itself.
"No cash consideration will be involved," the company said, as the unit being merged is a wholly owned subsidiary.Moreover, no shares will be issued, so the company's shareholding pattern will not change following the merger, it added.
Heritage Novandie manufactures flavoured yogurt under the "Livo" brand for Heritage Foods, which procures, processes, manufactures and markets milk and milk products, including fresh milk and a range of value-added dairy items.
The proposed scheme of amalgamation requires approvals from the jurisdictional bench of the National Company Law Tribunal, shareholders and other applicable authorities, the company said in a regulatory filing.
The draft scheme will be submitted to the stock exchanges in due course, it said.
Heritage Foods said the merger would allow it to integrate businesses and financial resources, use cash flows more efficiently and simplify its group structure by eliminating a legal entity and cutting duplicative statutory, regulatory and administrative requirements.
It also expects the combination to support unified management, faster decision-making, and savings through better use of resources, production capabilities and business processes, as well as lower administrative and operational costs.
Bringing the yogurt business into Heritage Foods' broader dairy platform is meant to support coordinated brand development and closer alignment with its consumer and distribution capabilities, the company said.
"The proposed amalgamation of Heritage Novandie Foods is an important step in strengthening our value-added dairy platform, while simplifying the overall structure," Executive Director Brahmani Nara said.
"As we continue to scale differentiated and branded dairy products, we believe this integration will further strengthen our platform for sustainable growth and enhance operational efficiency over the long term," she added. - PTI
