Alcan Protects Indian Investment

After a bitter battle, Alcan Aluminium of Canada pipped Sterlite Industries to the post by buying out more than 51 per cent stake in Indal, where it already holds 34.6 per cent.

The deal now gives the Canadian aluminium giant full management control of Indal. By paying Rs 200 per share, Alcan's total acquisition cost will be Rs 285 crore for a 20 per cent, which will take its total shareholding to 54.6 per cent.

The deal was concluded yesterday after Alcan's merchant banker J M Financial and Consultancy Services bought 15,900 shares in the open market at Rs 200 per share.

Since the deal took place before 12 noon, Alcan offered the same price to all shareholders and financial institutions, who hold 36.1 per cent plumped for it. Alcan, however, plans to accept only 20 per cent. Suresh Thadani, Alcan chief financial officer and vice-president tried to play down the entire deal.

"It is a normal business transaction. It happens everywhere in the world. Since it is happening first time in India, there is a lot of excitement," he said.

He reiterated Alcan's continued support for Indal and its management. "It is business as usual now," he added and ruled out any changes in the Indal top management.

Though Alcan held less than 51 per cent, Indal had always been a part of Alcan's global network. Its accounts are consolidated in Alcan's accounts, Indal's personnel are sent to Alcan's centres worldwide for training and they also form a part of Alcan's worldwide management pool.

Thadani himself worked in Indal's finance department between 1976-81, before leaving for Alcan.

The acquisition may not lead to any dramatic changes in Indal immediately. Alcan has already committed to Indal's future projects including the Utkal Alumina project costing over Rs 3,000 crore. Indal also has projects on hand of over Rs 1,500 crore.

The deal, however, successfully guards Alcan's investment in India, which is one of its major Asian associate companies, along with Nippon Light Metal of Japan. Losing Indal to Sterlite would have been a severe blow to Alcan as it would then have to rebuild its investment in India from scratch.

Indal sources said the Alcan acquisition would change nothing and it is business as usual.