Indian consumer goods company Hindustan Unilever Limited (HUL) has signed an agreement with LT Foods to sell its rice exports business to Delhi-based LT Foods Middle East DMCC.
The deal includes the sale of two HUL brands, namely Gold Seal Indus Valley and Rozana.
The sale of the brands is in line with Unilever's plan to exit non-core businesses, while focusing on the growth of its core packaged food business.
Unilever will sell the brands for nearly Rs250m ($3.7mn), which is subject to closing adjustments and CCI approval.
HUL will have to manage and operate the business until the transaction is complete over the next few months.
HUL managing director and CEO Sanjiv Mehta said: "Over the years, Gold Seal Indus Valley and Rozana have become household names in the rice category across the overseas markets in which they operate.
"The brands enjoy strong equity and have been delighting consumers through a range of high-quality offerings in basmati rice.
"Given the context of our portfolio priorities, we believe that it is in the best interest of the business to sell these brands to a strategic player such as LT Foods, who is capable and well-positioned to unlock their full potential."
The deal will not only expand the position of LT Foods in the Middle Eastern Market with the company's entry in the markets of Bahrain, Qatar and Oman, but will also boost its business in the UAE, Kuwait and Saudi Arabia.
The brand also enjoys latent equity in North America, India, and a number of countries in Asia and the European Union.
Speaking about the acquisition, LT Foods managing director V K Arora said: "It will broaden our basket of offerings of brands with a high recall value."
The deal follows the sale of bread and bakery business under the Modern brand by the local arm of Anglo-Dutch Unilever.
The bread and bakery business was sold to Nimman Foods, a company backed by private equity fund Everstone Group.
