Aluminium-based consumer products maker Hindalco informed on Friday that it has signed a definitive agreement to acquire Norway-headquartered, Hydro's Aluminium Extrusions Business in Andhra Pradesh for an enterprise value of Rs 247 crore.
Hindalco said the transaction is expected to close next quarter. The Indian aluminium products maker informed that Hydro's Kuppam plant has a 15,00-ton aluminium extrusions capacity and is capable to carry out surface finishing and fabrication.
Aluminium-based consumer products maker Hindalco informed on Friday that it has signed a definitive agreement to acquire Norway-headquartered, Hydro's Aluminium Extrusions Business in Andhra Pradesh for an enterprise value of Rs 247 crore.
The transaction is expected to close next quarter.
Hindalco stated that the acquisition would further the company's presence in Southern India - which is the second-largest extrusions market in India. The Indian aluminium products maker informed that Hydro's Kuppam plant has a 15,00-ton aluminium extrusions capacity and is capable to carry out surface finishing and fabrication.
"The acquisition of the Kuppam plant is a strategic step to expand our presence in the upper-end of the value-added market. The plant’s specialised product portfolio will enhance our capabilities in high-end extrusions and fabricated solutions. The acquisition is the latest step in our long-term strategy to augment our downstream business," stated Managing Director at Hindalco, Satish Pai.
The company added that the acquisition would also help expand its product portfolio and increase revenue from value-added products. It added that the newly-acquired plant would serve as an archetype for Hindalco's upcoming extrusions plant in Silvassa in Western India.
According to Hindalco, the aluminium extrusions market in India is expected to grow from 373,000 tonnes at present to about 850,000 tonnes by 2030. It added that once commissioned the Silvassa and Kuppam plants would boost the company's total extrusions capacity to 109,000 tonnes from the present 60,000 tonnes.
At the time of publishing, Hindalco's stock was up 1.07 per cent at Rs 455.35 on the BSE. the stock was trading 1.05 per cent higher at Rs 455.25 on the NSE.
In November, the Aditya Birla subsidiary had announced its acquisition of 100 per cent equity in wire and cable maker Polycab India's wholly-owned subsidiary, Ryker Base in an all-cash deal for an enterprise value of Rs 323 crore (Rs 3,230 million). Post-debt and capital and working capital adjustment, the purchase value came to around Rs 167 crore.
Hindalco had stated that the acquisition would strengthen its copper rod manufacturing capacity by, "providing a time to time market advantage allowing the Company to cater to the growing demand from electrical and electronic sectors."