UPL looks to combine global and local crop protection business as part of second major reorganisation

UPL Limited is looking to combine its global and local crop protection businesses as part of a second major reorganisation following one that was announced four years ago, according to sources familiar with the matter.

The reasons for the reorganisation include streamlining focus on the crop protection business and also clearing the corporate structure as the two businesses have overlapping shareholders, mainly Abu Dhabi Investment Authority and TPG, they said.

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An announcement could follow shortly, as per the sources.

ADIA and TPG had pumped in $1.2 billion to support UPL’s $4 billion acquisition of Arysta Crop Sciences in 2018. In lieu of that support, they were granted a 22% stake in UPL Corp which was later transferred to UPL Ltd, Cayman, as part of a 2022 restructuring which saw the separation of the local and global crop protection businesses.

At the time of the 2022 restructuring, ADIA and TPG co-invested with Brookfield and made a fresh investment of Rs.1,583 crore in UPL SAS, a company that would house the local crop protection business.

As per sources, the management has had a rethink of how to approach the crop protection business and deem it fit to combine the local and global business for greater operational focus, as per sources.

The management can also explore value unlocking opportunities for the combined business in a more efficient way, they said.

UPL had not responded to ET’s queries sent on Thursday and follow up queries sent on Friday at the time of publication of this report.

UPL Limited is into specialty chemicals, crop protection and seeds businesses.

The seeds business was carved out into a separate entity named Advanta as part of the 2022 restructuring. Advanta is a subsidiary of UPL. Advanta has filed papers for an initial public offering recently. KKR is one of the investors in that company. The IPO will target to raise around $350 million (Rs. 3,184 crore).

UPL has been saddled with debt as a result of the 2018 Arysta acquisition.

In a note released in January 2025, CRISIL noted that it had nearly Rs. 30,000 crore in debt, but also highlighted that there were no major maturities until the second half of 2026.

Its EBITDA leverage is around 4.5x, as per that report.

The company has been growing operating margins which are expected to reach 18%. However, revenue growth is projected to remain in the low single digits in percentage terms as per a Moodys report release in August which cautioned that the company may grow revenue by a modest 4% in fy 2025-2026.

At the time of its report, Moodys changed UPL Limited’s rating from Ba2 negative to Ba2 stable. “The ratings affirmation and outlook change to stable are driven by the strengthening in UPL’s credit profile supported by continuous efforts in structurally improving working capital management, which we believe will be sustained,” Moodys said at the time.