Tata Chemicals sells urea biz to Yara Fertilisers

MUMBAI: Tata Chemicals has agreed to sell its urea business in Uttar Pradesh to global fertiliser major Yara International for $400 million. The transaction will be on a debt and cash-free basis, the foreign company said.

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Following the announcement, shares of Tata Chemicals rose 8.77% on the Bombay Stock Exchange (BSE). It gained 10% intra-day.

The transaction will be subject to regulatory approvals, and the process will take 9-12 months.

“This acquisition represents another significant step in our growth strategy, creating an integrated position in the world’s second-largest fertiliser market. India has strong population growth and increasing living standards, and significant potential to improve agricultural productivity,” said Svein Tore Holsether, president and CEO, Yara.

Tata Chemicals’ UP plant has an annual production capacity of 0.7 million tonnes of ammonia and 1.2 million tonnes of urea, and generated revenues of $350 million 2015-16.

Yara is present in India since 1990.