December 20, 2010

Tata Chemicals acquires 100-per-cent stake in leading vacuum salt producer British Salt, UK

  • Investment value — £93 million (approximately Rs650 crore)
  • Move to secure critical raw material for Brunner Mond operations
  • Entry into food segments in the UK
  • Potential for gas storage business
Mumbai: Brunner Mond, UK, a wholly-owned subsidiary of Tata Chemicals, signed a binding agreement to acquire 100-per-cent stake in British Salt. The deal has been structured appropriately through a holding company Tata Chemicals Europe Holdings.

British Salt is the UK's leading manufacturer of pure dried vacuum salt products and enjoys a 50-per-cent market share in the UK. The company owns brine wells in the UK with residual life of 50 years. The acquisition provides an opportunity to secure long-term brine supplies for Brunner Mond operations. Apart from the core business of salt manufacturing and supplying, British Salt is also active in the gas storage business and has a promising business model which has the potential to generate additional cash flows for the business.

Speaking on the development, R Mukundan, managing director, Tata Chemicals, said, “The acquisition is in line with the strategy of Tata Chemicals to deepen its presence in the food and farm sectors and will result in securitising raw material for Brunner Mond operations. This will help Brunner Mond to maintain its low-cost manufacturing position in Europe and provides a great opportunity to optimise the costs further. The combined entity will improve the overall financial position of our European operations.”

Adding further on the acquisition move, PK Ghose, executive director and chief financial officer, Tata Chemicals, said, “The acquisition valued at £93 million will be entirely debt-financed on a non-recourse basis to Tata Chemicals.”