SINGAPORE:Â India’s Adani Group has announced its decision to exit its consumer goods joint venture with Singapore-based Wilmar International in a deal valued at $2 billion.
The divestment aligns with the Indian conglomerate’s focus on its core infrastructure business.
As part of the agreement, flagship company Adani Enterprises will sell a 13% stake in Adani Wilmar to meet India’s regulatory minimum public shareholding requirements. Additionally, Wilmar will purchase Adani’s remaining 31% stake at a price not exceeding ₹305 per share.
This valuation represents a 7.2% discount to Adani Wilmar’s closing price on Monday and values the stake at approximately $1.44 billion.
The transaction comes in the wake of allegations from U.S. authorities accusing Gautam Adani, the group’s founder, and senior executives of paying $265 million in bribes to secure Indian power contracts.
Adani Group has firmly denied these accusations, calling them “baseless.”
Proceeds from the sale will be directed toward expanding Adani’s core infrastructure businesses, which include renewable energy, coal, airports, defense, aerospace, and cement. The group has already committed billions of dollars to investments in these sectors.
Wilmar, a major player in Asia’s agribusiness sector, has stated that the acquisition will be financed through internal resources and bank borrowings.
The company also plans to explore partnerships with strategic investors to enhance growth opportunities for Adani Wilmar, established in 1999.
Wilmar highlighted the significant growth potential in the Indian subcontinent, including markets in Bangladesh, Sri Lanka, and Pakistan.
The company highlighted the importance of India’s rural market, where Adani Wilmar is well-positioned to capture a substantial share of the agri-food segment.
Adani Wilmar, a leading name in India’s edible oils and food sector, operates 24 factories across 15 cities. The company produces the popular Fortune sunflower oil brand, among other products. Following the transaction, the company is expected to undergo a rebranding.
The announcement had a positive impact on Adani Enterprises’ stock, which closed nearly 8% higher after the news broke.