Grasim Industries Ltd has agreed to sell its fertiliser business to Singapore’s Indorama Corporation Pte. Ltd for Rs 2,649 crore (about $355 million) in cash.
Grasim, a flagship company of the diversified Aditya Birla Group, said the sale is a significant “value unlocking” exercise and will help it pursue growth opportunities in its core businesses.
Indo Gulf Fertilisers is involved in the manufacturing, trading, and sale of urea and other agricultural inputs. The company operates a 1.2 million tonne per annum manufacturing plant in Uttar Pradesh’s Jagdishpur.
The unit shall be transferred to Indorama India on a slump sale basis, pursuant to a scheme of arrangement. The consideration for the transaction is subject to necessary statutory and regulatory approvals, Grasim said.
“We are excited about this union and believe it will facilitate greater access and development of high quality agri inputs for the farming community,” Indorama Corporation vice-chairman Amit Lohia said.
Grasim is one of the world’s biggest producers of viscose staple fibre. It is also the largest producer of chlor-alkali and linen in India. Besides, its unit UltraTech Cement Ltd is India’s biggest producer of the building material. Another unit Aditya Birla Capital Ltd is a diversified financial services firm.
Cyril Amarchand Mangaldas acted as the legal adviser to Grasim Industries on the transaction, while Bansi S Mehta & Co and Kotak Mahindra Capital Co Ltd acted as independent valuers and fairness opinion providers.
Shares of Grasim ended trading on Friday 1.54% up at Rs 839.5 apiece. Per stock-exchange data, the company reported consolidated net sales of Rs 77,625.1 crore for the 2019-20 financial year, along with post-tax profits of Rs 6,677.48 crore. It currently has a market capitalisation of Rs 55,234 crore.
The company has also made some acquisitions in the past to shore up its product and business portfolio. In March last year, for example, reports said that it was set to acquire the entire Indian subsidiary of Turkey-based fabric maker Soktas for Rs 165 crore (around $23 million).
Similarly, in February that year, it said it had signed a definitive agreement to acquire the chlor-alkali business of KPR Industries (India) Ltd for Rs 253 crore (around $35.4 million) in a cash deal.