Grasim Industries to divest its Fertiliser Business to Indorama Corporation for Rs 2,649 crore

Aditya Birla Group's flagship company, Grasim Industries has decided to exit from its fertilizer business by way of a slump sale to Indorama India Private Ltd, the company said in its press release. Grasim will receive a cash consideration of Rs 2,649 crore.

Grasim in its regulatory filing said, "The Board of Directors of Grasim Industries Limited ("Grasim" or "the Company"), at its meeting held today, approved the divestment of the Company's Fertiliser Business, Indo Gulf Fertilisers ("IGF"), by way of a slump sale to Indorama India Private Ltd ("IIP"), a subsidiary of Indorama Corporation Pte. Ltd, Singapore ("Indorama Corporation")." It added, "The transfer of the business will be for a lump-sum cash consideration of Rs 2,649 crore to be paid by IIP to Grasim. This consideration is commensurate to the strength and future potential of the business."

Indo Gulf Fertilisers (IGF) is engaged in manufacturing, trading, and sale of urea and other agri-inputs with a 1.2 Mn TPA Urea manufacturing plant at Jagdishpur in Uttar Pradesh.

The divestment of the Fertiliser Business is a significant value unlocking exercise for Grasim. It will further enable the Company to pursue growth opportunities in its core businesses.

Speaking on the transaction, Mr Dilip Gaur, MD Grasim Industries Ltd said "The divestment of the Fertiliser business by Grasim is a strategic portfolio choice and unlocks value for the shareholders. It is in line with the strategic thrust of the Company to focus on core businesses. Indo Gulf Fertilisers is synonymous with strong performance and high sustainability standards. To take it to the next level in size and value, the company is pleased to have found in Indorama Corporation, a credible fertiliser player to own IGF. IGF will benefit from synergies and expertise of Indorama Corporation's existing Agri portfolio."

The Fertiliser Business shall be transferred to IIP on slump sale basis, pursuant to a scheme of arrangement. The lump sum consideration is subject to certain adjustments as agreed between the parties in terms of the definitive agreement and the Scheme.

Mr Amit Lohia, Vice Chairman of Indorama Corporation, said, "We are pleased that with this acquisition, Shaktiman and the Paras brands will be able to join hands to offer a complete range of products for our farmers including urea, phosphate fertilisers, potash, soil health products, seeds, and crop protection products. We are excited about this union and believe it will facilitate greater access and development of high-quality agri inputs for the farming community."

The transaction is subject to the necessary statutory and regulatory approvals including approvals of the NCLT, the Stock Exchanges, SEBI, Competition Commission of India (CCI), the respective Shareholders and lenders/ creditors of each of the companies.