MUMBAI, India (AP) — India's Tata Chemicals Ltd. has signed an agreement to buy U.S.-based chemical company General Chemical Industrial Products Inc. for US$1.005 billion (euro0.68 billion), company officials said Thursday.
General Chemical Industrial Products is a major soda ash producer with a capacity of 2.5 million metric tons (2.76 tons) a year. Soda ash, or sodium carbonate, is used in the manufacture of glass.
''This is a timely acquisition from an Indian viewpoint. We are picking up a U.S. asset at a time when the Indian rupee is strong,'' Homi Khusrokhan, Tata Chemical's managing director, told reporters.
''It's strategically important for us as a group. I think, this particular acquisition is going to change the fortune of Tata Chemicals in the years to come,'' Khusrokhan added.
Khusrokhan said the acquisition will be funded through a mix of debt and equity, but he declined to give details. Tata Chemicals didn't give a timeframe for closing the deal.
R. Mukundan, Tata Chemical's executive vice president, said General Chemical Industrial Products has annual revenues of close to US$400 million (euro270.09 million)
The acquisition will lead to a sizable increase in Tata Chemicals' global soda ash capacity, making it one of the largest soda ash producers worldwide, the company said in a separate statement.
The merger will give Tata Chemicals access to markets in North America, Latin America and the Far East, adding to its existing markets, the statement said.
General Chemical Industrial Products has facilities located in the Green River Basin in Wyoming, which gives it access to the world's largest trona ore deposits, the statement said. Trona ore can be converted into soda ash.
Tata Chemicals, which gets about 40 percent of its consolidated revenue from the soda ash business, currently has a combined capacity of 2.9 million metric tons (3.2 tons) of soda ash a year.
Tata Chemicals shares closed down 7.2 percent at 305 rupees on the Bombay Stock Exchange, as the market awaited more information on the acquisition.
Tata Group is one of India's leading business conglomerates with interests spanning steel, software services, hotels, chemicals and insurance.
