Diversified conglomerate ITC Ltd said it will sell its entire 100% stake in its US-based wholly-owned subsidiary King Maker Marketing, which supplies premium quality cigarettes, for about $24 million (Rs 160 crore).
The stake sale, which is subject to regulatory approvals, is expected to be completed by November 30, ITC said in a stock market disclosure.
The unit will be bought by another US firm Premier Manufacturing Inc., which was founded in 1995. The company specialises in the marketing and sales of controlled/private-label products and programmes.
The product lines of King Maker Marketing, which was established in 1994, include the Ace, Checkers, Gold Crest, and Hi-Val brand families, according to its website. King Maker Marketing is based in New Jersey and distributes its products nationwide from its warehouse in Illinois.
King Maker Marketing recorded net sales of $32.7 million during the financial year ended March 31, 2016 against $29.3 million in the previous fiscal, according to ITC's annual report. It had earned a net income of $0.53 million in the last fiscal against $0.14 million in the previous year.
The cigarette industry in the US continues to be adversely impacted by long-term decline in cigarette consumption and growing illicit trade due to tax differential between various states, ITC noted in the annual report.
ITC is known mostly as a cigarette maker to a diversified group with presence ranging from FMCG, hospitality, paperboard and packaging, IT and agri business. The cigarette business contributed 62.70% to the gross turnover of the company in the last fiscal.
Early in June, marking a shift in the management ITC said that Chairman Y C Deveshwar will step aside from his executive role to a non-executive one at the end of his current tenure in February next year. Deveshwar (69), who joined ITC in 1968 had assumed office as Executive Chairman in January, 1996.
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