Germany’s leading chemical manufacturer Lanxess AG has announced the acquisition of the chemical and wind power business of Mumbai based Gwalior Chemical Industries, in a deal valued at Rs 536 crore. The acquisition will be funded through internal accruals.
The deal marks the first Indian acquisition by Lanxess and is in line with its longterm strategy of expanding in BRIC countries which accounted for approximately 16 per cent of its total revenue in 2008. Lanxess is bullish on growing its business in Asia, and India is the second most important Asian market for the company after China. The company recently took over the business and production assets of China-based Jiangsu Polyols Chemical and intends to continue to purchase companies available at attractive valuations.
Gwalior’s business matches the portfolio of Lanxess’ basic chemicals unit and will reinforce its production capabilities in the Indian market. Gwalior is expected to invest the sale proceeds in its power generation and specialty chemicals businesses and plans a cash distribution of Rs 100 crore to its shareholders.