Tata Chem buys US soda ash maker @$1 bn

Written by Reuters | Mumbai, January 31: | Updated: Jan 31 2008, 18:26pm hrs
India's Tata Chemicals Ltd said on Thursday it has agreed to buy US-based soda-ash producer General Chemical Industrial Products Inc, pushing up its shares in the Mumbai market.

The Indian chemicals maker said it will pay $1.005 billion for the acquisition, but details of the financing were not immediately available.

This will boost its total soda ash capacity to 5.5 million tonnes a year, from 3 million tonnes now. Tata Chemicals shares rose to a high of 347 rupees on the news, and were trading 3.2 percent higher at 339.40 rupees.

General Chemical operates a 2.5-million-tonnes a year soda ash capacity in Wyoming, a region that holds the world's largest reserve of raw ore. Soda ash is used as raw material in making glass, soap, detergent, paper, textiles and food products.

The company mainly supplies soda ash in North America, but also exports the product to several countries, according to its Web site. It also manufactures calcium chloride.

Analysts said at the current valuation, Tata Chemicals paid around 16,000 rupees per tonne of soda ash capacity, comparable to similar deals by Indian companies recently.

Tata Chemicals acquired UK's Brunner Mond Group in December 2005, giving it soda ash manufacturing capabilities in Europe and Africa. That deal was totally worth 8.6 billion rupees ($220 million).