MUMBAI: Aditya Birla group company, Aditya Birla Chemicals (India), today said that it will acquire the chloro chemicals pision of Kanoria Chemicals & Industries Limited (KCIL) for a cash consideration of Rs 830-crore.

“The Board of Directors of Aditya Birla Chemicals (India) Limited (ABCIL), a company of the Aditya Birla Group, today approved the acquisition of the Chloro Chemicals Division (CCD) of Kanoria Chemicals & Industries Limited (KCIL) for a cash consideration of Rs 830-crore,” the company said in a press release issued here.

With this acquisition, the total caustic soda capacity of ABCIL will increase from 1,05,000 tpa to 2,20,000 tpa.

ABCIL is a chlor alkali producer with its plant located at Rehla in Jharkhand and this transaction takes ABCIL to a higher growth trajectory, the release said.

The transaction will be done on a slump sale basis and is subject to customary corporate and other approvals, and is expected to be completed towards end-May 2011, it said.

The chloro chemicals pision (CCD) of Kanoria Chemicals & Industries Limited is located at Renukoot in Uttar Pradesh and manufactures chlor-alkalis, chlorine derivatives and water treatment chemicals.

The current annual capacity of caustic soda at the facility is 1,15,000-tonnes per annum.

“CCD is highly cost-competitive, driven by strengths of the latest manufacturing technology, captive power plants with coal linkage and forward integration into value-adding chlorine derivatives,” the release said.

CCD’s revenues for the year ended March 31, 2010, stood at Rs 303-crore.

Aditya Birla Group’s Chairman, Kumar Mangalam Birla, said “a compelling strategic fit, this acquisition further strengthens our group’s standing in the chlor alkali/caustic soda sector. This acquisition solidifies the group’s position as the country’s largest producer of chlor alkali.”

“It is a critical input in the aluminium sector. Given our large expansion plans for our aluminium business, this serves as an excellent sourcing point, besides, of course, bolstering our capacity to service our customers. The business has potential for both growth in revenues and earnings. I warmly welcome the strong team that comes along with this acquisition,” Birla said.

ABCIL will finance the transaction from internal accruals and borrowings, the release said.

Aditya Birla Group’s Business Head for Chemicals, Lalit Naik, said “the unit offers significant potential and infrastructure to expand the business which will serve the increasing need for caustic soda, both within our group and for the external market. In addition, we also expect significant operational synergies on account of logistics and other cost savings.”

ABCIL (formerly known as Bihar Caustic and Chemicals), is one of the leading chlor-alkali companies in eastern India.

Commissioned in 1984, and with various expansions, caustic soda capacity today stands at 1,05,000 tpa. For value addition and effective utilisation of chlorine, the company manufactures aluminium chloride and stable bleaching powder.