Financial Daily from THE HINDU group of publications
Friday, Oct 04, 2002
Financial Daily from THE HINDU group of publications Friday, Oct 04, 2002 |
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Corporate
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Mergers & Acquisitions Chambal Fert to acquire 51% in Australian biotech giant C.R. Sukumar
HYDERABAD, Oct. 3 IN a major development, Chambal Fertilisers and Chemicals Ltd (CFCL), the agri-inputs major belonging to the K.K. Birla-controlled Zuari-Chambal group, has decided to acquire a controlling stake of 51 per cent in the Australian agri-biotechnology giant - Technico Pty Ltd. Towards this move, considered as backward integration for the seed potato technology, the CFCL board has approved a proposal to invest up to Australian $18.62 million in the Australian company to acquire majority holding. CFCL already has a 50:50 joint venture with Technico - Chambal Agritech Ltd (CAL), which is engaged in the production of miniature potato seeds called Technituber. As a part of its strategy to enter into global potato seed market, CFCL had identified Technico for a strategic alliance. Technico, which is specialising in usage of advanced agricultural practices for the potato industry, currently commands a strong market leadership especially in the technology for rapid multiplication of seed potatoes. It is currently operating in India, Australia and China. Technico also has strategic alliances with global leaders in potato chips. In this backdrop, the CFCL management is of the view that the acquisition of controlling stake in Technico would enable it have continuous technology transfer and future Research and Development efforts, which were considered key to the success of CAL. In a communiqué to shareholders, CFCL said: "The proposed strategic investment and resultant controlling stake in Technico will enable your company to get into worldwide potato seed business at an attractive valuation. On a stand-alone basis also, Technico presents an attractive investment opportunity." CFCL plans to make the proposed investment of $18.62 million either by itself or jointly with its associate companies through a special purpose vehicle to be created for this purpose outside India. The investment includes consideration of Australian $4 million for transfer to Technico or SPV, as the case may be, 50 per cent of equity currently held by CFCL in CAL. Chambal Fertilisers, which has convened an extraordinary general meeting of its shareholders on November 8 to seek their consent for the proposed investment, said the investment would be funded by internal accruals and/or borrowings from banks and financial institutions.
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