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Aditya Birla Group Completes Columbian Chemicals Deal

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Aditya Birla Group Completes Columbian Chemicals Deal

 

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June 21, 2011

The Aditya Birla Group today announced the completion of the transaction relating to its acquisition of the Atlanta-based Columbian Chemicals Company, subsequent to having obtained all regulatory approvals in seven different jurisdictions. The acquisition of Columbian Chemicals was made at a price of US $ 875 million. It catapults the Aditya Birla Group to the world’s No. 1 carbon black producer.

The newly constituted Board of Directors for Columbian Chemicals is chaired by Mr. Kumar Mangalam Birla, Chairman, Aditya Birla Group. Other Directors from the Group, include Mrs. Rajashree Birla, Mr. Rajiv Dube, Dr. Santrupt Misra, Mr. D. D. Rathi and Mr. Kevin Boyle, CEO, Columbian Chemicals.

Says Mr. Birla, “We view the Carbon Black business as a significant global business in our portfolio. There is a lot to be derived from this coming together of the two entities. Columbian Chemicals’ excellent R&D capability, multiple speciality products, customer connect in North America and South America, coupled with committed teams, will add to the strength of the Carbon Black business. Likewise, our strength in scale economies, managing large capacity plants and managing multiple emerging markets, will be leveraged. This, together, with the experience and expertise that our teams have in growing an acquired company’s revenues and earnings significantly, should enable us take the Carbon Black business to a far higher plane.”

Adds Dr. Santrupt Misra, “The completion of the acquisition of Columbian Chemicals is indeed a milestone in our Carbon Black business. At one stroke it doubles our capacity, from 1 million tons to 2 million tons. It extends our geographic reach. Our global footprint now spans 12 countries – India, Thailand, Egypt, China, USA, Brazil, Korea, Spain, Canada, Hungary, Germany and Italy, where we collectively have 17 state-of-theart manufacturing units. The deal helps in giving us a foothold in the mature markets of North America and strengthens our position in Europe and in emerging markets. Our focus is on unrelenting value creation and optimizing costs through innovation in areas such as logistics, sourcing and technology. We expect synergies in excess US $ 50 million.”

The Aditya Birla Group is among the most cost efficient manufacturers of carbon black. It is a global provider of high quality carbon black additives that cater to the requirements of leading tyre and other rubber manufacturers. Its products also service the ink and plastic segments.

A US $30 billion corporation, the Aditya Birla Group is in the League of Fortune 500. It is anchored by an extraordinary force of over 131,000 employees, belonging to 42 different nationalities. The Group has been adjudged among the top two Best Employers in India by the Aon–Hewitt Study conducted recently. Earlier it has been rated as the six great places for leaders to work in the Asia Pacific Region (The Hewitt Associates, The RBL Group and Fortune Magazine Study 2009). The Group operates in 33 countries. Over 60 per cent of its revenues of US $ 30 billion flow from its overseas operations.

 

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Categories
General Press

Birla Carbon Announces Agreement to Acquire Columbian Chemicals

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Birla Carbon Announces Agreement to Acquire Columbian Chemicals

 

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January 31, 2011

The Aditya Birla Group today announced that it has entered into a definitive agreement to acquire the Atlanta-based Columbian Chemicals Company, from One Equity Partners, the merchant banking arm of J. P. Morgan Chase & Co.

The Aditya Birla Group has bought One Equity Partners’ equity in Columbian Chemicals through its associates, Alexandria Carbon Black Company and Thai Carbon Black Company Limited along with SKI Investment, an Aditya Birla Group Company.

Briefing the media on this significant development, Mr. Kumar Mangalam Birla, Chairman, Aditya Birla Group, said, “The acquisition of Columbian Chemicals catapults Birla Carbon to become a leading player globally in this sector, by raising its annual production to 2 million tons. We look upon the carbon black business as a core business that has a strong growth potential both in terms of revenues and earnings. This acquisition is in keeping with our objective of being a leader in every business that the Group operates in. The Aditya Birla Group’s Carbon Black business and that of Columbian Chemicals complement each other. This acquisition will create a business which will have the advantage of cutting edge technology and low costs, and will have a truly global footprint.”

“Our vision has been to be a premium carbon black player, global in size and reach. The acquisition of Columbian Chemicals, which takes us closer to our vision, is a perfect fit for Birla Carbon. Their assets and the expertise of the team will provide a stronger platform for higher growth and ongoing success” averred Mr. Birla.

Dr. Santrupt Misra, CEO, Birla Carbon and Director, HR, of the Aditya Birla Group, added – “We look forward to leveraging the strengths of both Columbian Chemicals and Birla Carbon. Their world-class service coupled with that of Birla Carbon, positions us well. Additionally, Columbian Chemicals accords us access to markets that we currently do not serve, thus enhancing our geographic reach. Columbian Chemicals also has a very strong Research & Development team of scientists engaged in process, technology and innovative products development. Columbian Chemicals has a rich legacy, a committed workforce and values that are in sync with our Group values”.

The Aditya Birla Group is one of the most cost-efficient manufacturers of Carbon Black. Its operations span four countries, with six manufacturing plants. It caters to the requirements of leading tyre manufacturers globally. Columbian Chemicals operates 11 plants in 9 countries.

The acquisition is subject to customary approvals. The deal is expected to attain closure in the second half of CY-11.

ANZ, BankAM, HSBC, RBS and StandChart are participating in the financing of the transaction and were also the financial advisors for this deal.

KPMG were our tax and accounting advisors, and Shearman & Sterling LLP, the legal counsel.

 

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