Global chemical manufacturing company BASF's Indian arm has received its board's approval to divest the textile chemicals business to Swiss conglomerate Archroma as part of a larger global deal, for Rs 64.13 crore ($10.1 million), according to a stock market disclosure.
BASF India will also receive Rs 39.90 crore ($6.3 million) from its parent BASF SE towards discontinuance of the business in terms of the commercial understanding reached between the parties. This takes the total value for divestment to the public listed Indian unit to Rs 104 crore ($16.4 million).
The deal is effective from July 1, 2015 and BASF will manufacture & supply the textile chemical products to Archroma India under a long-term supply agreement.
Last October, Archroma had struck a global deal with BASF for acquiring its textile chemical business. However, at that time it did not disclose the deal value for the India leg of the transaction.
The acquisition strengthens Archroma’s position as a clear industry leader in supplying chemicals and dyes to the global textile industry.
“The operational and intellectual synergies between BASF and Archroma will allow us to offer our customers the full breadth and depth of innovation, quality, reliability, expertise and market coverage they need to prosper in these market conditions," said Alexander Wessels, CEO of Archroma.
Archroma, a portfolio company of US-based private investment company SK Capital Partners, is engaged in three businesses—textile specialties, paper solutions and emulsion products business. Headquartered in Reinach, the firm has around 3,000 employees in over 35 countries.
SK Capital created the company in September 2013 after acquiring a set of business units from Clariant. Clariant's Indian unit had also sold its textile chemicals, paper specialties and emulsions business to Archroma for Rs 209.15 crore ($33.88 million), back then.
Founded in 1943, BASF India manufactures chemicals and its products include expandable polystyrene, tanning agents, leather chemicals and auxiliaries including specialised metal complex dyes, leather dyes, textile chemicals, etc.
Shares of BASF India were trading at Rs 1,189.95 each, down 0.62 per cent on BSE in a strong Mumbai market on Thursday at1.36 PM.