Lanxess India Pvt Ltd, a subsidiary of specialty chemicals group Lanxess AG, will acquire the chemical businesses and assets of stock market-listed Indian company Gwalior Chemical Industries Ltd for Rs 536 crore. The transaction is subject to formal approval by Gwalior?s shareholders and clearance by the relevant antitrust authorities, Lanxess said in a media release. The closing of the deal is expected at the end of the third quarter of 2009.

Gwalior Chemical Industries shares rose 4.17% on the Bombay Stock Exchange on Monday to close at Rs 107.30. This is Lanxess? first acquisition in India and part of the company?s long-term growth strategy in BRIC countries, said Axel C Heitmann, chairman of Lanxess? board of management. ?Gwalior?s business complements the portfolio of the basic chemicals business unit and will strengthen our production base in the exciting Indian market,? he added.

Founded in 1978, Mumbai-based Gwalior employs about 400 permanent staff. In the first nine months of its business year 2008-09, Gwalior achieved sales of approximately Rs 306 crore and an above-peer Ebitda margin of approximately 18%.

?We are delighted to have reached this landmark transaction. We are convinced that the business as well as employees will go from strength to strength under the new management of Lanxess,? said Ashwin Kothari, chairman of Gwalior Chemical Industries Ltd.

Gwalior is one of the largest Indian producers of benzyl products and one of the leading global producers of sulphur chlorides for the agrochemicals, pharmaceutical as well as flavor & fragrance industries. Its production sites are at Nagda in Madhya Pradesh, and in Ankleshwar, Gujarat. In future, production will be concentrated at the modern Nagda site, which is currently expanding its capacity, the release added.

With some 1,000 employees worldwide, the Lanxess Basic Chemicals business unit is one of the leading manufacturers of raw materials for agrochemicals, polymers, surface coatings and pigments. It operates several production sites in Germany, China and the United States.