KOLKATA: Aditya Birla Chemicals (India) Ltd (ABCIL), part of the $40 billion Indian conglomerate led by billionaire Kumar Mangalam Birla, will acquire the chlor-alkali pision of SK Bangur-controlled Jayshree Chemicals (JCL) for Rs 212 crore in an all-cash deal as the group looks to consolidate its leadership of the segment.

The company board approved the purchase on a slump-sale basis on Monday. The strategic acquisition will enhance its caustic soda capacity to about 3,55,000 tonnes per annum (tpa). A slump sale is one in which an asset is bought in its entirety without assigning values to inpidual units.

“It will take our chlor-alkali business on a higher growth trajectory,” said Birla, chairman of the Aditya Birla Group. “The buyout also solidifies the group’s position as the country’s largest producer of chlor-alkali and bolsters caustic soda supply, which is a critical input for the aluminium business. The business has potential for future growth.”

Established in 1984, Aditya Birla Chemicals manufactures various chlorine derivatives as value-added products. Jayshree’s chlor-alkali pision is located at Ganjam in Odisha and has a 57,000 tpa capacity, employing about 350 people. The company also has about 1,600 acres of salt works in Andhra Pradesh.

The group expects significant operational synergies on account of cost savings, said Lalit Naik, head of chemicals at the Aditya Birla Group, which has a large presence in Odisha.

The acquisition and proposed capital expenditure will be funded through a mix of internal accruals and debt. The transaction is subject to statutory and regulatory approvals, the company said in its release.

Caustic soda is an essential input in the manufacture of alumina and is used widely in various other industries. Jayshree’s Odisha plant is close to various aluminium manufacturing units including Hindalco’s Utkal Refinery, and those of Nalco and Vedanta, offering the prospect of growth opportunities for the plant.