Adani Enterprises to end FMCG joint venture with Wilmar International
What's the story
Adani Enterprises, the flagship firm of the Adani Group, has announced its decision to sell its entire stake in Adani Wilmar. The company revealed this in a filing with stock exchanges today. Under this divestment plan, a 13% stake will be sold off to meet minimum public shareholder requirements. Additionally, Wilmar International has agreed to buy the remaining 31% stake in Adani Wilmar from Adani Enterprises.
Acquisition
Wilmar International to acquire remaining stake
The deal is expected to generate over $2 billion for Adani Enterprises. The company plans to use the funds for its 'core infrastructure platforms.' After this divestment, all nominee directors of the Adani Group will resign from the board of Adani Wilmar.
Rebranding
Adani Wilmar to undergo name change post-divestment
After the divestment, steps will be taken to rename the company from Adani Wilmar. The new names being considered are 'AWL Limited,' 'AWL Agri Business Limited,' and 'Fortune Agri Business Limited.' The final decision on the new name will be subject to the approval of the Ministry of Corporate Affairs. Currently, Adani Commodities holds a 43.94% stake in Adani Wilmar while Lence Pte., a subsidiary of Wilmar International, owns an equal share.
Stake value
Adani's current stake in Adani Wilmar
The stake Adani Enterprises currently holds in Adani Wilmar is worth over $2 billion. The company anticipates completing the transaction by March 31, 2025. The proceeds from the deal will be utilized to improve the incubation capacity of Adani Enterprises, and focus on consumer services under the Airports and Adani Digital arm.
Market reaction
Adani Enterprises's shares surge
After the divestment announcement, Adani Enterprises's shares surged, closing 7.3% higher at ₹2,585. However, interestingly, the stock has declined over 11% overall in 2024. Meanwhile, Adani Wilmar's shares closed 1.8% lower at ₹323.25 after recovering from lows initially, and are also down 12% this year.