Switzerland based Gate Gourmet in Joint Venture with India Hospitality Corp. for purchase of a majority interest in Skygourmet

Switzerland based Gate Gourmet announced it had entered a joint venture with India Hospitality Corp. that will see it acquire a majority stake in the Indian firm’s unit. Gate Gourmet said it will be picking up the majority stake in India Hospitality Corp.’s Skygourmet, the country’s foremost airline caterer. Skygourmet has a presence in about seven Indian cities. Gate Gourmet is a unit of the gategroup of companies and this investment marks a major move for the Group.

The firm reiterated that this transaction is a major move into the Asian market and a strategic breakthrough into the world’s second-fastest growing economy where airline traffic recently has been increasing at an average of about 20 per cent.

The transaction was concluded Thursday and is not subject to any further regulatory or shareholder approvals.  gategroup has acquired a 74 per cent interest in Skygourmet and the consideration is a combination of cash and assumption of debt. India Hospitality Corp will retain a 26 per cent interest.

gategroup Chief Executive Officer Guy Dubois said India’s vibrant economy and its surging airline industry offer an excellent opportunity, adding that the Skygourmet acquisition fits perfectly with gategroup’s growth strategy and with its objective to add to shareholder value by increasing gategroup’s presence in emerging markets. He further reiterated his confidence that this addition will grow gategroup’s top line and improve profit margins.

India is a greenfield expansion opportunity for gategroup, and we are pleased that IHC retains an interest in Skygourmet to help us adapt to this vibrant market, Dubois added.

However, on his part, Ravi Deol, Indian Hospitality Corp. Managing Director and Chief Executive Officer, said noted the investment is a win-win situation for both companies. This partnership with a category leader will combine Skygourmet’s leadership and knowledge of the Indian market with Gate Gourmet’s global best practices, he said.

The combination will create significant value for the shareholders and provide superior service to customers. Indian Hospitality Corp. remains committed to the Indian market and will continue its focus on developing consumer opportunities, added Deol.

Skygourmet has a production capacity of more than 110,000 meals per day and is the only one with catering facilities at all six of India’s major airports. It operates in Mumbai, Delhi, Bangalore, Chennai and Hyderabad and is in the process of constructing a new unit in Kolkata. In Pune, Skygourmet has a franchise arrangement.

12 Nov 2010.