Coromandel International Ltd Acquires Majority Stake in NACL Industries
Coromandel International Ltd has announced its acquisition of a 53% stake in NACL Industries Ltd for a total consideration of ₹820 crore. This strategic move signifies Coromandel’s expansion within the agrochemical segment, with plans to further enhance its market presence.
Details of the Acquisition
The acquisition involves the purchase of 10,68,96,146 equity shares of NACL Industries, representing 53.13% of its paid-up equity share capital. A formal share purchase agreement has been established between Coromandel International, NACL Industries Ltd, KLR Products Ltd (the seller), and members of the promoter group.
Coromandel plans to issue an open offer, targeting an additional acquisition of up to 26% of the equity share capital, compliant with the Securities and Exchange Board of India (SEBI) Takeover Regulations.
Strategic Implications and Future Outlook
This acquisition is poised to enhance Coromandel’s status as a key player in the Indian crop protection industry, leveraging NACL’s established technical capabilities, extensive product portfolio, and nationwide presence in agricultural formulations. According to Coromandel, the transaction is expected to bolster operational scale and accelerate entry into the contract manufacturing sector.
NACL Industries’ Capabilities
NACL Industries boasts several technical and formulation plants located in Andhra Pradesh, along with a centralized research and development facility near Hyderabad. Recently, NACL’s subsidiary has invested in a new facility at Dahej, focused on the production of active ingredients. The company has maintained strong partnerships with global firms for contract manufacturing services for over two decades.
Comments from Leadership
Arun Alagappan, Executive Chairman of Coromandel, emphasized the strategic nature of this acquisition, stating, “Coromandel’s long-term strategy has always been centred on driving sustainable growth and market leadership. The decision to acquire NACL Industries is a natural extension of the company’s growth vision.” He elaborated on the potential benefits, highlighting that the merger of Coromandel’s distribution network with NACL’s manufacturing prowess sets the foundation for significant scale and market penetration.
Conclusion
The proposed transaction, which is anticipated to be finalized in the coming months, reflects Coromandel International’s commitment to expanding its footprint in the agro chemical sector and improving its competitive edge in the industry.
