Tata Chemicals to buy British Salt for 93 mn pounds
Tata Chemicals said on Monday its unit has signed a binding agreement to acquire 100% stake in British Salt for 93 million British pounds.
British Salt is a UK based maker of pure dried vacuum salt and has a market share of 50% in the UK, it said in a statement.
British Salt owns brine wells in UK with residual life of 50 years, it added.
The acquisition provides an opportunity to secure long term supply of brine for Brunner Mond, the Indian firm said in a statement on Monday, pushing its share up more than 2%.
The acquisition would be financed entirely via debt with no recourse to Tata Chemicals, it said. Tata Chemicals is part of the salt-to-software Tata group.
“In terms of valuation, it is attractive,” Mehul Desai, analyst with KR Choksey Shares and Securities, said talking about the deal.
“The acquisition also fits in terms of business strategies and we remain positive on this acquisition for Tata Chemicals,” Desai added.
Apart from the core business of salt, British Salt is also active in the gas storage business and has a business model, which has a potential to generate additional cash flows for the business, Tata Chemicals said in a statement.
The Mumbai-based firm had signed an agreement in October to 100% equity of South Africa-based bio-fuels firm Grown Energy Pty for USD 1.1 million.
Source: – Moneycontrol
