Ess Dee Aluminium, whose promoter Sudip Datta once depended on Alcan for the bulk of his income, has joined the race to acquire the packaging business of the Montreal-based giant which was recently taken over by Rio Tinto. The Mumbai-headquartered Ess Dee is the second domestic contender, the other being Essel Propack.
Bankers in the know of the development said there was a third contender as well — Australia’s Amcore. Rio Tinto, the new promoter of Alcan, has already begun talks with the three companies, they said, adding that the deal size is expected to be around $1 billion (Rs 4,000 crore), or 1.2 times the turnover of the target.
Rio Tinto, which recently acquired Alcan for $38 billion, decided to pull out of the packaging business as it does not fit into Alcan’s core area of operations and has been looking for a buyer for the past two months. Alcan makes packaging material for food and beverages, medical and pharmaceuticals as well as cosmetics and tobacco industries.
For Ess Dee, the successful acquisition of the packaging business of Alcan will give it presence in 13 countries —something which, otherwise, will take at least 10 years. Ess Dee posted net profit of Rs 37 crore and net sales of Rs 141 crore last year.It is learnt that DSP Merrill Lynch and Enam are advising Ess Dee on the acquisition.
Read more in The Business Standard article.
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