Specialty chemicals company Lanxess India Pvt Ltd is set to acquire the chemical businesses and some assets of Gwalior Chemical Industries Ltd for Rs 536 crore (€82.4 million), a cost that includes debt of Rs 156 crore (€24 million).
It is the first acquisition of Lanxess India, a subsidiary of Germany-headquartered Lanxess AG, and the deal is expected to conclude by the end of the third quarter of the current fiscal. Gwalior Chemical will continue to remain an independent company.
An agreement has been formalised between the two companies, pending approval from Gwalior Chemical’s shareholders and market regulator. Since the transaction involves an asset sale, Lanxess will not be required to go in for an open offer of Gwalior Chemical’s shares.
Gwalior Chemical, founded in 1978, produces benzyl and sulphur chlorides for the agrochemicals, pharmaceutical as well as flavour and fragrance industries. It has production sites in Nagda, Madhya Pradesh and in Ankleshwar, Gujarat.
However, Lanxess would be only taking over the Nagda plant of Gwalior Chemical and all future production would be concentrated there. The deal includes a transfer of 400 people to the specialty chemicals major.
In addition to the acquisition of Gwalior Chemical, Lanxess on Monday announced the takeover of the business and production assets of China’s Jiangsu Polyols Chemical Co Ltd. Both parties have agreed not to disclose the purchase price.