RHI Magnesita is in process of acquiring the refractory business of Dalmia Bharat Refractories Limited (DBRL) in India for about Rs 1,708 crore, Stefan Borgas, CEO of the Vienna-based company, has said. The share swap deal is being made through RHI Magnesita India, he added.
“DBRL will transfer its business to Dalmia OCL (DOCL). Under the terms of a share swap agreement, RHI Magnesita will acquire all outstanding shares in DOCL in exchange for 27 million new shares in RHI Magnesita India Limited,” Borgas said.
Based on the issuance price of RHI Magnesita India Limited at Rs 632.5029 per share, the share consideration had a value of approximately Rs 1,708 crore (about 208 million euros), the CEO said.
The acquisition will significantly increase RHI Magnesita’s presence in the fast-growing Indian refractory market, with steel production in India expected to grow 12 per cent in 2022, and a 7-8 per cent compound annual growth rate until 2030, Borgas added.
Refractory is used by a wide range of industries, including steel, cement, non-ferrous metals and glass during the manufacturing process.
Magnesita employs approximately 1,200 people in India and has an annual production capacity of over 3 lakh tonne refractory from five plants and raw material sites.
The acquisition will add production capacities in important industrial regions in the south and west region where RHI Magnesita currently had no assets, he said.
“The integration of the DBRL business into our network will underline our position as the leading player in the Indian refractory market. This transaction represents a strong commitment from the senior management to continue strengthening the company’s operations in\ India and to further expand our footprint in the region,” Parmod Sagar, CEO of RHI Magnesita India, said.
