Tata Chemicals entered into a Business Transfer Agreement with Allied Silica Limited to acquire their business of precipitated silica for a consideration of 123 crores on a slump sale basis. The deal is expected to be closed within three months. This acquisition is a part of the Rs. 295 crore investment approved by the Board during Feb 2017, towards this specialty business.
The agreement includes the acquisition of an existing manufacturing site in Tamil Nadu, which will produce Highly Dispersible Silica (HDS). The specialty chemical product represents a downstream value addition to Tata Chemicals soda ash business, where it ranks among the top manufacturers globally.
Commenting on the move, R Mukundan, Managing Director, Tata Chemicals said, “This acquisition is another step in our journey to build technologically enabled, differentiated businesses, with greater customer centricity, by leveraging our core strengths. The manufacture of speciality and performance silicas is one such area. This is in line with our focus to grow our specialty business, along with our consumer business.”
Precipitated silica is a versatile product with applications in many industries including rubber, oral care, coatings and agrochemicals. The acquisition also offers the possibility to make value added silica in the future for applications that demand high performance. The technology for manufacturing HDS, for which eight patents have already been filed, has been developed at the Company’s Innovation Centre in Pune.