The Aditya Birla Group on Monday announced an agreement acquire US-based Columbian Chemicals Company (CCC) One Equity Partners, the merchant banking arm of JP Morgan Chase, for $875 million or over Rs 4,013 crore, in a move aimed at doubling its capacity as a carbon black manufacturer.
CCC is the world’s third-largest manufacturer of carbon black and has a 16% global market share in the segment.
The group has bought 100% equity in CCC through its associates Alexandria Carbon Black Company, Thai Carbon Black Company and group company SKI Investment. SKI will hold 58% in CCC, while Alexandria and Thai Carbon will have 21% each, the company said.
The group will raise debt for the acquisition. Two of the three associate companies will see $450 million in debts on their balance sheet for funding the acquistion, the company said.
“The acquisition will help us become a leading player globally in the sector by raising our annual production to 2 million tonnes. Moreover the acquisition will help us enter new markets,” said Kumar Mangalam Birla, chairman, Aditya Birla Group.
The group plans to foray into North America, Canada, Brazil, Germany, Italy and increase foot print in China, company officials said. At present, CCC operates 11 plants in nine countries and the deal will take the group’s total carbon black capacity to 2 million tonne per annum. The group currently has a capacity of 0.94 million tonnes per annum.
The deal is expected to be completed by the first half of 2011 and will yield synergies of aound $50 million. ANZ, BankAM, HSBC, RBS and StanChart are participating in the financing of the transaction and were also the financial advisors for the deal, the company said in a statement.