Birla Group confirms agreement to buy Columbian Chemicals

ERJ staff report (LMH)

Mumbai - Aditya Birla Group is to buy US carbon black manufacturer Columbian Chemicals Co., the Indian company announced today, 31 Jan.

The group's Birla Carbon division has entered into a definitive agreement to acquire the Marietta, Georgia-based company from One Equity Partners, the merchant banking arm of JP Morgan Chase & Co.

A spokesperson for One Equity Partners could not confirm how much the acquisition was worth but local reports in India suggest the purchase price is about $875 million.

The deal is subject to customary approvals, but is expected to close in the second half of 2011.

“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,” Aditya Birla Group chairman, Kumar Mangalam Birla told media at today's press conference in Mumbai.

“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,” he said.

The acquisition was carried out through the Birla Group's associates Alexandria Carbon Black Co. and Thai Carbon Black Co. Ltd along with SKI Investment, an Aditya Birla Group Company.

Previously the fourth-largest producer of carbon black in the world, this is the Indian group's first major acquisition in the carbon black industry. Its operations span four countries with six manufacturing plants in Egypt, China, Thailand and India. Columbian Chemicals operates 11 plants in 9 countries.

The Birla Group previously said it was bidding for the Degussa carbon black business being sold by Evonik, though local reports suggest Birla will withdraw any offer with Evonik in the light of the current deal..The Birla spokesman would neither confirm nor deny the rumour.

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Press release from Aditya Birla