Anupam Rasayan India Ltd. (ARIL) announced that its Board of Directors has approved the acquisition of 24.96% of the total equity shareholding and joint control of Tanfac Industries Limited (TIL) from Birla Group Holdings Private Limited (BGH).

Launching of an open offer under the Securities Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 2011, Anupam Rasayan will acquire a further 26% shareholding from the public shareholders of TIL.

ARIL has also executed an amendment agreement to the joint venture agreement dated 4 October 1980 between Tamil Nadu Industrial Development Corporation (TIDCO) and Birla Group Holdings Private Limited pursuant to which ARIL will replace BGH as the joint venture partner of TIDCO in TIL, subject to compliance with the Securities Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 2011.

The consideration for the acquisition of shares from the sellers is Rs. 148.14 crore and the open offer (assuming full acceptance) is Rs. 154.31 crore which will be funded through debt. Pursuant to the acquisition, ARIL will become a promoter and will have joint control in TIL along with TIDCO.

Speaking about the acquisition, Anand Desai, Managing Director, ARIL said, “We are very pleased to announce our investment in Tanfac industries. Tanfac is strategically fit for our fluorination chemistry business. This will not only reduce our import dependence but will also let us launch new derivatives under this chemistry which was not possible earlier. We will add niche Fluoro derivatives which will have application in Crop protection, Pharma intermediates and Polymers such as Fluoro Elastomers and Fluoro Electrolytes and other Polymers which have application in Polyamide and Semiconductors."

"We will also expand the speciality chemical business of TIL, thereby improving existing margins of TIL. This business will be EPS accretive from day one. We aim to unlock the full potential of the Tanfac Industries and drive significant value creation through synergies between Anupam and Tanfac,” added Desai.

This acquisition is a strategic decision to expand the product series under the fluorination chemistry of ARIL. It brings synergies by way of backward integration initially as ARIL is one of the largest consumers of Potassium Fluoride in India which would be supplied by TIL.