Yara International ASA (Oslo, Norway; www.yara.com) has entered into an agreement to acquire the Tata Chemicals Ltd. (TCL; Mumbai; www.tatachemicals.com) Babrala urea plant and distribution business in Uttar Pradesh for $400 million on a debt and cash free basis, including normalized net working capital.
“This acquisition represents another significant step in our growth strategy, creating an integrated position in the world’s second-largest fertilizer market. India has strong population growth and increasing living standards, and significant potential to improve agricultural productivity,” said Svein Tore Holsether, President and Chief Executive Officer of Yara.
The plant has an annual production of 0.7 million metric tons (m.t.) ammonia and 1.2 million m.t. of urea, and generated revenues and EBITDA of respectively $350 million and $35 million in the financial year ended 31 March 2016. The plant was commissioned in 1994.
“We are impressed with the world-class operations we have seen in Babrala. The workforce is committed to high HESQ standards, and has a solid safety track record. This well operated plant and its highly skilled employees will make an excellent addition to Yara’s global production system,” said Holsether.
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 after which closing of the transaction can take place.