Jindal Poly Films Ltd has struck a deal to acquire the global biaxially oriented polypropylene (BOPP) business of ExxonMobil Chemical for $235 million. ExxonMobil is the world’s largest company in terms of revenues and is into oil &gas, as well as chemicals business. The transaction is expected to be closed by July 2013.
Jindal Poly said last October that it had signed an agreement for such a deal but did not share the transaction details. VCCircle reported that the deal could run into multi-million dollars, given the asset involved.
The deal involves acquisition of five BOPP production units located across the US and Europe. These include two units in the US in Georgia and Oklahoma, and facilities in Belgium, the Netherlands and Italy in Europe. The acquisition also includes a technology centre and a sales office in New York, and an office in Luxembourg. The business employs around 1,500 people across geographies.
This will ensure a major boost to Jindal Poly Films, which currently has a combined BOPP and BOPET capacity of 3.4 lakh tonnes. The acquisition will boost its capacity by a third to 4.45 lakh tonnes, making it one of the top global players in the business.
BOPP films are a chemical derivative, used by food packaging, consumer products and textile sectors.
In another deal in the same space, Max India sold its polypropylene film manufacturing unit to Germany’s Treofan last year for Rs 540 crore ($97 million). Max Speciality Films has an output capacity of about 52,000 tonnes of BOPP film per annum.
Public-listed Jindal Poly Films closed FY12 with revenues of Rs 2,364 crore, with net profit of Rs 135 crore. It had reserves of around Rs 1,675 crore as of March 31, 2012.
This is not the first time the BC Jindal Group firm has eyed global expansion in the BOPP film business. In 2003, it had acquired French firm Rexor, S.A., but later sold 60 per cent stake in this venture.
Jindal Poly Films has significantly scaled up through greenfield and brownfield expansion of capacity over the past eight years in India.
Two years ago, the company also said that it was investing up to Rs 660 crore in Jindal India Powertech Ltd, a power generation firm.
(Edited by Sanghamitra Mandal)