Tata Chem is world number three after Brunner Mond buy

Group revenues of Tata Chemicals Ltd. will reach USD 1 billion following the acquisition of UK-based soda ash maker Brunner Mond Group, the Indian group said 26 December 2005.
The purchase, funded th…

Group revenues of Tata Chemicals Ltd. will reach USD 1 billion following the acquisition of UK-based soda ash maker Brunner Mond Group, the Indian group said 26 December 2005. The purchase, funded through current cash balances including funds from a recent USD 150 million convertible bond issue, will make Tata Chemicals the world“s third-biggest soda ash maker, the firm“s managing director said. Brussels-based Solvay SA and US-listed FMC Corp. are ahead of Tata Chemicals in the ranking. Tata Chemicals said on 23 December 2005 that it agreed to buy 63.5% of Brunner Mond, once part of the UK“s ICI Plc, from Wayland Investments Ltd. and Barclays Bank for USD 113 million. “It is a company that has gone through very, very difficult times and 2004 was probably one of the worst years it faced,” Managing Director Prasad Menon told reporters. “We believe it is a very good buy.” Menon did not comment on the profitability of the company but said there was a “strong possibility of a rebound”. Menon said Tata Chemicals will soon make an offer to Brunner Mond Group“s shareholders to acquire the remaining 36.5%. “Our intention is to own 100% of it. Let us see what happens to the offer,” he said. If successful, the total cost of the acquisition would be around INR 7.8-8.0 billion (USD 155-177 million), Menon said. Tata Chemicals“ soda ash capacity production will total nearly 3 million tonnes after the acquisition, he said. In 2004, Brunner Mond Group“s revenue was about GBP 180 million (USD 312 million) while its debt was nearly GBP 50 million, Menon said. Menon said some of the loans would be due for rescheduling by end-2006 and the company planned to take some interest benefits on them. Currently, the interest rates varied between 1.5% and 4.5% over Libor, Menon said. Lazard Capital advised on the deal.