Lanxess buys Gwalior Chem arm
Germany’s Lanxess AG, a global specialty chemicals group, has announced its decision to acquire the chemical businesses and assets of Gwalior Chemicals Ltd for 82.4 million euros to expand its product line in India. HT Correspondent reports.business Updated: Jun 08, 2009 23:37 IST
Germany’s Lanxess AG, a global specialty chemicals group, has announced its decision to acquire the chemical businesses and assets of Gwalior Chemicals Ltd for 82.4 million euros (Rs 536 crore) to expand its product line in India. The firm is one of the leading Indian producers of benzyl and a leading global producer of sulphur chlorides used in the making of agrochemicals, pharmaceuticals, flavours and fragrances.
Lanxess India Private Ltd, a subsidiary of the German major, will carry out the acquisition, subject to necessary approvals. The acquisition will be funded by inernal accruals and debt (20 million euros). The transaction is scheduled to be completed in the third quarter of 2009, senior company officials said.
An agreement for the transfer of the business has been reached with Gwalior Chemicals, which is listed on both the National Stock Exchange and the Bombay Stock Exchange. Its stock rose 4.17 per cent to close at Rs. 107.30 per share after the announcement.
“This is our first acquisition in India and a further milestone in our comoany’s llong term growth strategy in BRIC countries,” Axel C. Heitmann, chairman of Lanxess’s board of management said in a video conference. “Gwalior’s business complements the portfolio of the basic chemicals business unit and will strengthen our production base in the existing Indian market,” he said.
Gwalior Chemicals was founded in 1978 and the chemical business has 400 employees working in two locations at Nagda in Madhya Pradesh and Ankleshwar in Gujarat. After the buyout, production will be concentrated at Nagda.
Gwalior Chemicals will continue with its other businesses, the company said.
“This is a landmark transaction. We are convinced that the business as well as employees will go from strength to strength under the new management,” said Ashwin Kothari, chairman, Gwalior Chemical Industries Ltd in a statement.