Indian firm targets Wagamama

08 November 2010

MUMBAI: India Hospitality Corporation, the leisure firm, has signalled its intention to bid for the fast-growing Wagamama noodles chain, in a sign of the rising international strength of brand owners based in India.

IHC, which faces competition for the acquisition, said it is prepared to pay at least $400m (€283m; £246m) for the firm, the Financial Times reports.

Analysts believe that Wagamama - an award-winning chain of pan-Asian noodle restaurants first launched in London - would be a good fit with the country's ongoing development of smart shopping malls.

It also reflects the rapid urbanisation of large swathes of the Indian population, triggered by the migration of thousands of traditional rural-dwellers to big cities such as New Delhi, Chennai and Mumbai.

The purchase of Wagamama, which is already established, mostly in the form of franchises, in 16 international markets including Turkey, Egypt and Kuwait, could be an important step for IHC.

Its ceo, Ravi Deol, an Indian entrepreneur who owns three hotels, an airline catering operation and a collection of restaurant brands, has made no secret of his expansion ambitions in the latter industry.

One person close to the Mumbai-based group said: "The opportunity to expand Wagamama's business in Asia, and in particular India, is massive for IHC.

"IHC is also a better fit to acquire a food chain as it has always been in the hospitality business."

Wagamama already owns three restaurants in the US and has plans to triple that number in the next three years.

Data sourced from Financial Times; additional content by Warc staff