Sector News

Nihon Nohyaku buys around 76% stake in Hyderabad Chemicals Ltd

November 27, 2014
Chemical Value Chain
Nihon Nohyaku, a Japanese fine chemicals maker has acquired around 76% stake in Hyderabad Chemicals Ltd. in a Rs 450 crore transaction, three people with knowledge of the development said. The transaction is yet another instance of the growing interest from Japanese corporations to have base in India. 
 
Tokyo-listed Nihon Nohyaku will get a large Indian base along with the technical know-how that Hyderabad Chemicals has developed over the last three decades. The company announced its acquisition on the Tokyo Stock Exchange on Thursday. 
 
“The promoters Shroff family has sold around 74% stake in the company to Nihon. The promoters will continue to manage the company alongwith members of Nihon,” a person involved in the deal said. 
 
Promoted by Shroff Family of the Excel Shroff Group, Hyderabad Chemicals is being valued at around Rs 620 crore. 
 
The company that manufactures technical grade pesticides and pesticides formulations. The company has a large research and development division that helped Nihon zero in on it, investment bankers privy to the transaction say. For the financial year ended 31 March, 2014, the company had a turnover of $65 million. 
 
“Generally, agrochemical companies are valued at 1.5-2.5 times their earnings,” a banker said on condition of anonymity. 
 
While KPMG advised Nihon on the transaction, EY’s M&A Advisory team was the exclusive financial advisor to Hyderabad Chemicals Ltd. 
 
The Rs 100 billion agrochemical industry in India is one of the largest market in Asia and is expected to attract many more multinational companies to come hunting for mergers and acquisitions, say experts. “This deal will pave way for further consolidation in the industry. Since India is a big market with good assets with sound technical knowhow and cost advantage are available, we will see a large number of global companies coming to India in near term,” a consultant said. 
 

comments closed

Related News

May 21, 2022

Sika opens new manufacturing plant in Bolivia 

Chemical Value Chain

Sika AG (Baar, Switzerland) has opened a new plant in Santa Cruz de la Sierra, thus doubling its production capacity for mortar and concrete admixtures in Bolivia. With this new facility in one of the country’s main industrial agglomerations, Sika is positioning itself for continued growth in the dynamic Bolivian construction market.

May 21, 2022

Chevron increases renewable fuel market share with REG acquisition

Chemical Value Chain

Chevron Corporation (NYSE: CVX) and Renewable Energy Group, Inc. (NASDAQ: REGI) (REG) announced on Monday a definitive agreement under which Chevron will acquire the outstanding shares of REG in an all-cash transaction valued at $3.15 billion, or $61.50 per share.

May 21, 2022

Lotte Chemical to invest $8 bn on hydrogen energy, battery materials by 2030

Chemical Value Chain

Lotte Chemical Corp. will invest 10 trillion won ($8 billion) on hydrogen and battery materials through 2030 to achieve annual revenue of 50 trillion won and carbon neutrality. The Korean chemical producer on Thursday unveiled its new corporate vision outlining key corporate strategies with focus on growth through hydrogen energy and battery materials businesses.