Aditya Birla Group Acquires Columbian Chemicals $ 875 million

Aditya Birla Group Acquires Columbian Chemicals for $ 875 million

4:12 PM, 25th May 2011
Aditya Birla Group Acquires Columbian Chemicals for $ 875 million

MUMBAI, INDIA: In a move that will make it the number one player in carbon black globally, the Aditya Birla Group has bought loss-making Columbian Chemicals for an enterprise value of $ 875 million. The stake, to be funded entirely through borrowings, has been bought from One Equity Partners. Kumar Mangalam Birla, chairman ABG, has said that the deal will give them a combined capacity of $ 2 million ton per annum and they will be infusing debt to the tune of $ 450 million. While they do not plan to merge the $ 1 billion Columbian Chemicals with Aditya Birla Nuvo, synergies of $ 50 million would be possible.


The deal will help Birla Carbon expand its footprint in North America, South America, Brazil, Germany, Italy, Spain, Hungry Korea and China. The global capacity of carbon black in 2011 is expected to be about 14.26 million ton with demand expected to be around 10.3 million ton. The maximum demand is expected to come from China and other Asian markets.


The acquisition will be completed in six months. According to Standard & Poor’s Columbian is the world’s third-largest carbon black manufacturer after Cabot and Evonik. The closely-held company has around 9 per cent global market share. According to speciality chemicals consulting firm Notch Consulting, Evonik and Columbian Chemicals together controlled 20 per cent of the 12.7 million ton per annum (tpa) global carbon black capacity in 2009. Evonik’s carbon black division has also been put on the block after it was identified by the company as a non-core unit.

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