Tatas in talks to acquire Gharda Chem
Buying out the unlisted Gharda Chemicals could boost Tata Chem’ position in the overseas market.
By Prince Mathews Thomas, TNN |
MUMBAI: The Tata group is on the prowl again. After sewing up one of the largest cross-border takeovers through Tata Tea, India’s leading business group is close to finalising another deal, this time in agro-chemicals.
Tata Chemicals, it’s reliably learnt, is in talks to buy out Mumbai-based, unlisted Gharda Chemicals (GCL) for an unspecified amount, a move that could boost Tata Chemicals’ position in the overseas market.
Chairman of the Rs 700-crore GCL, Keki Gharda, confirmed that he has been approached by the group for a possible buy out. But he declined to elaborate. “The talks are on... it’s too early to say anything more,” was all he told ET.
However sources close to the development added that the deal could be wrapped up in two months. Despite repeated efforts Tata Chemicals officials weren’t available for comment.
GCL is one of the most successful and biggest agrochemical companies and is known for its pioneering work in process development and research and development knowledge. The company has a broad product basket including insecticides, pesticides, veterinary drugs and polymers. It also has 200 researchers on its payrolls.
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Interestingly, if the deal takes place, GCL may be merged with Tata group company Rallis India, a major in agrochemicals, said sources. “GCL and Rallis have a decade-long relationship. They have been buying and selling products to each other. Moreover, almost half of GCL product portfolio is similar to that of Tata Chemicals and Rallis. This could be a perfect marriage of two like-minded companies,” they added. When contacted, senior Rallis executives offered no comments. The market has been sensing the possibility of a deal. Although shares of Tata Chemicals ended down 0.04% at Rs 224.7 on the BSE on Thursday due to a weak market. The stock grew 12% in the past month outpacing the Sensex which grew by 9.3%.
Analysts say that GCL’s products will not only boost Tata Chemicals’ profitability, but also help the Tata company to increase its presence in the US and European markets. Sources said that almost 60% of GCL’s revenue last year came from overseas markets. Gharda has operating companies in the US, Canada, Argentina and Brazil. “Through its London office, Gharda also has a wide network with formulators in Europe,” the sources added.
The latest move is also learnt to be suited to Mr Gharda’s plans. A septuagenarian, Mr Gharda has been looking for a management change to take care of the company after his lifetime. A chemical engineer and chemist, Mr Gharda founded GCL after completing his doctorate in chemical engineering from University of Michigan. The first unit came up in 1964.
GCL has three manufacturing units - Dombivili and Lote in Maharashtra, and Panoli in Gujarat. In 1980, the company along with Gujarat Agro Industries Corporation, built Gujarat Insecticides. Later, Gharda took over Gujarat Insecticides, which has a unit in Ankheleshwar, Gujarat.
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