Carborundum Universal buys 84 pc stake in Russian firm

CHENNAI: Murugappa group company Carborundum Universal Ltd (CUMI) on Friday said it has acquired majority stake in a Russian firm for $37 million (about Rs 150 crore).

The company acquired 84 per cent ordinary shares of Volzhsky Abrasive Works (VAW), located in the Volgograd region of Russia. The acquisition was made through its wholly-owned subsidiary CUMI International Ltd, a company statement said.

CUMI, engaged in manufacture of coated and bonded abrasives, is one among the two fully vertically integrated players in the world in this space. VAW is a leading producer of bonded abrasives products and refractories, with sales of 54 million dollars in 2006.

VAW holds on date 12.67 per cent of its ordinary shares as treasury investment, which represents about 10 per cent of VAW's charter capital. Cancellation of VAW's treasury shares would result in CUMI's holding going up to 96 per cent of the ordinary shares. An open offer for the balance 4 per cent ordinary shares is being made as per statutory norms.

CUMI said the synergy between the two firms is expected to enhance value and growth.

The scrip of the company jumped 1.01 per cent to Rs 179.85 on the Bombay Stock Exchange.

CUMI is a flagship company of the $2 billion Murugappa Group and has also forayed into material science areas such as ceramics and electrominerals.