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The Aditya Birla group has agreed to acquire 100 per cent equity of Atlanta-based Columbian Chemicals Company (CCC) for $875 million (Rs 3,937 crore). Two of A. V. Group's international subsidiaries — Alexandria Carbon Black Company and Thai Carbon Black Company — and its investment arm SKI Investment will buy out One Equity Partners, the merchant banking arm of JP Morgan Chase & Co.
The deal is expected to be closed in six months. A.V. Birla group companies Alexandria and Thai Carbon Black will hold 21 per cent each, and SKI Investment 58 per cent in CCC. The deal is to be financed entirely through debt which will have recourse to the target company's as well as acquiring companies' books.
The combined revenue of CCC and Aditya Birla Group's carbon black business is about $2 billion. But CCC will continue to remain a separate company, said Mr Kumar Mangalam Birla, Chairman, Aditya Birla Group.
CCC has annual revenues of $1 billion and operating profits of $140 million. Hit by the global slowdown, CCC is currently in the red but is expected to turn around by 2012, he added.
The acquisition will add two million tonnes of carbon black capacity to the Group and extend its reach in the markets of North America, Canada, Brazil, Germany, Italy and China, besides enabling it tap the CCC technology and its research and development team.
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