Ess Dee Aluminium to pump in Rs600 cr in acquisitions

Aluminiums packaging firm Ess Dee Aluminium has set aside about Rs500-600 crore most of which would be spent over next one year primarily in acquisitions.The company is striving for huge growth through the inorganic route earmarking Rs500-600 crore for acquisitions in the domestic and international markets.

The company is eyeing Kolkata-based India Foils currently under the Sterlite Group.
Confirming the development, Sudip Dutta,managing director Ess Dee Aluminium said the company was in the fray for India Foils currently under the Sterlite group.

India Foils has three units of which two are closed.Ess Dee had sought state government assistance like electricity subsidy and sales tax waiver for the turnaround.The company has also bid for Alcan’s packaging business which could be valued at $1 billion.

Read more in The Livemint article.

Ess Dee plans to buy Alcan arm

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.

Hindalco snaps up entire Alcan stake in Utkal

Aditya Birla Group flagship Hindalco Industries on Wednesday completed its bid to own Utkal Alumina, a joint venture it had with Alcan, when it agreed to buy out the Canadian company’s 45% equity stake in the venture for an undisclosed amount. The acquisition of Utkal Alumina would give Hindalco ownership of 195 million tonnes of high grade bauxite, that is a key raw material for making aluminium metal.

Although Hindalco officials declined to specify the amount they will spend to buy out Alcan’s stake, it has been learnt that an alumina plant of 1.5 million tonnes capacity will cost Rs 5,000 crore to build. The acquisition of Utkal Alumina also gives the Birlas complete ownership of high grade alumina which could be used to feed the group’s forthcoming aluminium projects. Once all projects are completed, the group will have ownership of about 5.2 million tonnes of alumina.

Alcan, which is at present the target of a friendly $38-billion takeover offer from British mining major Rio Tinto, had in April announced its plan to exit the joint venture. Hindalco held the remaining 55% stake and the first right of refusal for its partner’s stake.

Read more in The Economic Times article.

Alcan plans takeovers, joint ventures in India

Alcan Inc, fighting a takeover attempt by Alcoa, today said it intends to expand operations in India through acquisitions and joint ventures.

The announcement comes within a couple of months after Alcan decided to pull out of Utkal Alumina International, its joint venture with the Aditya Birla Group, by selling its 45% stake.

“You will be hearing about more acquisitions in the next two to three years,” said Steve Henning, director (strategy) at Alcan Composites. He was addressing a press conference to announce the acquisition of 76% stake in Alukbond India, maker and seller of agricultural facades, for an undisclosed amount. The company posted sales of $5 million last year.

He, however, didn’t give details of the proposed expansion plans in India. Analysts said the expansion plan of the Montreal-based aluminium maker would depend on the future ownership of the company which had recently rejected a $27.6 billion takeover bid from Alcoa.

Read more in The Business Standard article.

Hindalco shares rise 4% on takeover buzz

The Aditya Birla group-promoted Hindalco industries, the country’s largest aluminium producer, surged by about 4 per cent on the bourses to Rs 146.60 on market buzz that it could be a takeover target of the Alcan-Sterlite combine.

On a dull trading day, the scrip was the top gainer among the 30 Sensex stocks. It hit a day’s high of Rs 156.25, before profit-booking saw the counter shedding early gains.

The Birla Group holds about 30 per cent stake in Hindalco with foreign institutional investors (FIIs) and institutions holding 20 per cent and 12 per cent, respectively. About 10 per cent is in GDRs, while the remaining is with retail investors.

Sources in the Birla Group said the consolidation in the metal industry was taking place across the world where an identifiable promoter is not present. In Hindalco’s case, there is an identifiable promoter who holds 30 percent stake and would not sell under any circumstances.

Read more in The Business Standard article.

Hindalco, Sterlite may join Alcan race

India's biggest aluminium maker, Hindalco, and Sterlite Industries, are in talks with global firms to separately bid for Canada's Alcan, said the media report on Wednesday. Citing unnamed sources, the report said Sterlite's parent Vedanta Resources Plc was in advanced talks with global miner Rio Tinto to form a special purpose vehicle to bid for the aluminium major.

London-based Vedanta will likely invest $3-$4 billion and Rio Tinto could put in $10-$12 billion in the joint venture, said the report.

Hindalco Industries Ltd, which earlier this year bought Canadian aluminium firm Novelis for $5.9 billion, was in talks with BHP Billiton for a joint bid but a deal was some distance away.

A Vedanta spokesman declined comment, while a spokeswoman for Hindalco said it was not the company's policy to comment on speculation.

Media reports earlier this week said Norwegian aluminium group Norsk Hydro and Rio Tinto might place separate bids to trump Alcoa's $28.5 billion hostile bid for Alcan, a takeover that would create the world's largest aluminium group.