Yara buys Tata Chemicals Indian urea plant

Business Wednesday 10/August/2016 13:09 PM
By: Times News Service
Yara buys Tata Chemicals Indian urea plant

Oslo: Yara International agreed to buy Tata Chemicals’ Babrala urea plant and distribution business in Uttar Pradesh, India, for $400 million, expanding its presence in the world’s second-largest fertiliser market.
The plant has an annual production of 0.7 million tonnes ammonia and 1.2 million tonnes urea and had sales of $350 million and earnings before interest, taxes, depreciation and amortisation of $35 million in the financial year that ended March 31, Oslo-based Yara said. The plant, commissioned in 1994, is the most energy efficient plant in India, with energy efficiency “on a par with Yara’s best plants,” the company said.
“India has strong population growth and increasing living standards, and significant potential to improve agricultural productivity,” Svein Tore Holsether, president and chief executive officer of Yara, said in the statement.
The agreement will be subject to regulatory approvals and sanctioning by the relevant courts in India, a process which is expected to take 9-12 months.
Tata Chemicals’ shares reversed a loss to rise as much as 8.6 per cent, the most since March 2014, and were up 6.6 per cent in Mumbai. Yara shares rose 0.6 per cent in Oslo.
The deal, which doesn’t include specialty products and complex fertilisers, will unlock value for Tata Chemicals, strengthen its balance sheet and allow it to to pursue growth and opportunities in line with its strategy, the Mumbai-based company said in a separate statement.