Jewelllery firm Rajesh Exports has bought Valcambi, the world's largest gold refining company, in an all-cash deal worth $400 million as it looks to secure raw material supplies at competitive prices.
After the acquisition, the world's largest gold jewellery maker will expand capacity at it's India-based refinery, Rajesh Mehta, the company's chairman told Reuters.
Rajesh Exports said in a statement on Monday that it sealed the purchase after a global sales process conducted by Valcambi's existing owners, led by Newmont Mining Corp.
"It will help Rajesh Exports in securing raw material like dore," said analyst Bhargava N Vaidya of BN Vaidya Associates. Dore is a semi-pure alloy of gold and silver. "Valcambi has world class refining technology. So it will help the Indian company in setting up or expanding refining capacity if it wants," he added.
India is the world's biggest consumer of gold, with annual demand hovering around 900 tonnes per year.
Over the past three years, Swiss-based Valcambi has on average refined and sold 945 tonnes gold and 325 tonnes silver per year, the statement said.
Valcambi's senior management team, including chief executive Michael Mesaric, will join Rajesh Exports to aid the ownership transition and future expansion.
Mesaric said in the statement that Valcambi would look to use Rajesh's technical expertise to produce innovative gold products in the European markets.
Shares of Rajesh Exports were trading 2 per cent higher on the Bombay Stock Exchange even as the wider market was in heavy losses. The 30-share Sensex was trading over 1 per cent down at 27,725.40.