Murugappa Group firm to acquire abrasives player Awuko's German assets

CUMI will get land, building, plant and machinery, fixed assets, leased assets, brands and trademarks with the deal.

The German arm of Murugappa Group firm Carborundum Universal (CUMI) has entered into an asset purchase agreement to acquire the assets of Awuko, a major player in abrasives, for Euro 6.01 million.

The deal signed on Wednesday lets CUMI acquire land, building, plant and machinery, fixed assets, leased assets, brands and trademarks, patents, technical knowhow and other intangible assets of the company. It excludes cash and receivables. The insolvency proceedings in Awuko had commenced recently and CUMI has been selected as the successful bidder in a competitive bidding process for the assets.

The asset purchase deal will be subject to completion of negotiations with the Works Council in connection with rightsizing of employees as well as agreements with the lessors/creditors of Awuko. The estimated purchase price is excluding the compensation cost to be agreed with the works council and other costs, if any with the insolvency administrator

“Acquiring the assets of AWUKO fits in well with CUMI’s expansion plans in Europe. CUMI will gain access to the Coated Abrasives capacity of 10 million square meters, global distribution base and an experienced process & application engineering team," said N Ananthaseshan, Managing Director of CUMI.

“Awuko is a 120-year-old leading brand in coated abrasives business. It is a market leader in leather and wood applications with a strong presence in Metal and Lacquer applications. The acquisition is in line with CUMI’s aggressive inorganic growth plans," said Sridharan Rangarajan, Director of Finance and Strategy of CUMI.

"With our expertise and experience in turning around the performance of stressed assets we intend to enhance our international offerings in Coated Abrasive products. CUMI will benefit with the access to varied technology and leveraging opportunity for each other’s brands,” he said.