Sudarshan Chemical to acquire Germany's Heubach for Rs 1,180 crore

Pune-based Sudarshan Chemical Industries (SCIL) has signed a definitive agreement to acquire the global pigment business operations of Germany’s Heubach Group for Rs 1,180 crore (€127.5 million).

Following the announcement, shares of SCIL jumped 19.1 per cent to Rs 1,208, valuing the company at Rs 8,359 crore.

The deal, a combination of asset and share acquisition, will help boost SCIL's product portfolio and provide access to Heubach's technological capabilities and strong presence in Europe and the Americas.

The merged entity will have a broad pigment portfolio, 19 global sites, and a diversified asset footprint. In 2022, Heubach became the world's second-largest pigment player after integrating with Clariant.

However, the group has been facing financial challenges over the past two years due to rising costs, inventory issues, and high interest rates.

The Heubach acquisition will help address these challenges with a clear turnaround plan, SCIL said in a release.

SCIL's managing director Rajesh Rathi will lead the combined company.
 

The deal will require regulatory approvals, including those from the Competition Commission of India and other authorities in various jurisdictions. The acquisition is expected to close in 3-4 months following approvals from regulators and SCIL shareholders.

Shares of SCIL have more than doubled so far this year. During FY24, the company clocked a net profit of Rs 335 crore on revenues of Rs 2,141 crore, while during the three-month period ended June 2024, it reported a net profit of Rs 41 crore on revenues of Rs 580 crore. Meanwhile, the consolidated turnover of the Heubach Group in 2023 was €879 million, down from €1,069 million.