Coromandel International, part of the Chennai-based Murugappa group, has acquired promoters? stake of 42.22% in Sabero Organics Gujarat, a listed entity that manufactures pesticides, fungicides, insecticides, among other chemicals, at its two plants.
The Coromandel board, which met on late Monday, has given its in-principle approval for acquiring 1,42,98,112 equity shares of the promoters of Sabero Organics, representing 42.22% of equity, at R160 a share. In addition to that Coromandel board has also agreed to pay a non-compete fee of R38.47 a share. Coromandel International has signed definitive share purchase agreement to acquire promoters stake in Sabero Organics Gujarat.
When contacted, Murugappa group chairman A Vellayan, told the FE: ?Together with Sabero Organics, Coromandel will become No. 5 now compared with No. 15 earlier. The total capacity, including that of Coromandel?s pesticide business, is estimated to be around 120,000 tonne a year.?
Responding to a question, Kapil Mehan, managing director, CIL, said: ?The total outgo for acquisition, including that of open offer is expected to be around R400 crore and the company is intended to purchase through internal accruals. We look forward for a bright future going forward.?
Vellayan said, ?We see a good synergy between us and this acquisition will help us to become a global player in this business as Sabero Organics is exporting 50% of its total capacity of 90,000 tonne to countries such as Brazil, Europe, Argentina among places. We have good formulations and they have good technical expertise. With huge domestic as well as overseas network, Coromandel will become a major player in this business going forward. As said we want to become one of the top three to five players in every business we operate and this is in this direction.?
Vellayan said: ?We have a small plant at Ankleshwar in Gujarat and Sabero too has two plants in the state, particularly in the chemical zone, which makes great synergy. We will continue to maintain as separate entity.?
Sabero Organics is a leading producer and supplier of a variety of fungicides, herbicides, insecticides and specialty chemicals and is a significant player in Mancozeb fungicide in global markets. The company has manufacturing operations in Gujarat and markets its products in India and abroad. The company has clocked a turnover of R413 crore in FY 11.