Investors reward Rain Calcining for $595m bid

NEW DELHI: Shares of Rain Calcining Ltd. rose by their daily limit after the company agreed to buy US- based CII Carbon LLC, the world's second-largest producer of calcined petroleum coke, for $595 million.

The stock rose as much as 20 per cent to Rs 42.5 on the Bombay Stock Exchange at 12:46 p.m. local time.

“There's momentum in the stock and I'd expect further upside from current levels,'' said Priyadarshi Srivastava, head of institutional sales at Mumbai-based Niche Brokerage Pvt.

The acquisition will help Rain Calcining become the world's biggest maker of the material used in the production of aluminum and titanium dioxide and reduce costs. Indian companies have spent a record $30 billion this year buying rivals overseas.

CII has production facilities in Illinois, Louisiana, Mississippi and West Virginia while Rain operates two kilns in the southern Indian city of Visakhapatnam.

The acquisition, routed through unit Rain/CII Holdings Inc., is expected to be completed this month, Hyderabad-based Rain Calcining said in an e-mailed statement.

Citigroup Inc. and ICICI Bank Ltd. will help raise the funds for the acquisition.