European specialty chemical major Lanxess has acquired the chemical and wind power assets of Mumbai based specialty chemical manufacturer Gwalior Chemical Industries for an aggregate value of 82.4 million euros (Rs 536 crore).
The deal is at a conversion rate of Rs 65 for a euro, on a cash and debt free basis and includes Gwalior Chemical’s estimated debts of Rs 156 crore. The chemical business of the company was valued Rs 380 crore.
Aswin Kothari, chairman of Gwalior Chemicals said the company would invest the sale proceeds in power generation business and manufacturing of high value specialty chemicals at Ankleshwar for which products have been identified. GCIL will also distribute upto Rs 100 crore to its shareholders, through a one-time dividend payout or share buyback.
Promoters of Gwalior Chemicals hold about 60 per cent stake in the company.
Lanxess will acquire the entire chemical business including the manufacturing assets at Nagda in Madhya Pradesh and the wind power business located in Maharashtra and Madhya Pradesh. GCIL will retain the manufacturing sites at Ankleswar in Gujarat, after the current chemical activities of the business have been relocated to Nagda.
This is the first acquisition of the 6.58-billion euro Lanxess in India.
“Gwalior’s business complements the portfolio of the basic chemicals business unit and will strengthen our production base in the exciting Indian market,” said Axel C Heitmann, chairman, Lanxess.
Gwalior Chemicals makes benzyl products and one of the leading global producers of sulphur chlorides for the agrochemicals, pharmaceutical as well as flavor and fragrance industries.
The acquisition will be financed out of existing liquidity and is subject to formal approval by Gwalior’s shareholders and clearance by the relevant antitrust authorities. Closing of the deal is expected at the end of the third quarter of 2009, said a Lanxess press release.
Source: Business-Standard