TCL makes it to the second largest soda maker

After the successfully acquisition of two-premium marquee Jaguar and Land Rover, Tata Inc has added a new jewel in its throne by taking-over US based Chemical Company ‘General Chemical Industrial Products Inc. (General Chemicals)’ on Thursday. This acquisition has come just a day after the successfully acquisition of two-esteemed British brand in Tata Motors kit. Now Tata Inc. has become one of the most leading groups in India in terms of overseas acquisition.

Tata Chemicals Ltd (TCL), the part of Tata Group on Thursday officially announced to complete the process of acquisition successfully of General Chemical Industrial Products Inc (General Chemical) in the USA by bidding over $1-billion. The officially announcement came on Thursday night after fulfilling all necessary regulatory requirements and approvals.

By taking over the General Chemicals, now TCL has become the world’s second largest soda ash company after Solvay as General Chemical (soda ash) Partners (GCSAP), the subsidiary of general Chemical was the top soda ash producers in the USA with a mammoth capacity of 2.5-million tpa of natural soda, whereas TCL produces 3.0-million tonnes of natural soda. The total capacity would enough to capture the 14% of global market followed by Solvay’s 19% grip.

Natural soda ash has unique advantage over synthetic soda of being environmental and user friendly and also manufactured in lower cost. Now, TCL will dominate in the natural soda due to acquiring General Chemicals as GCSAP has world’s two lowest cost natural soda ash reserves in the Wyoming (USA) and Magadi (Kenya).

Interacting to media persons after the completion of the deal, Homi Khusrokhan, the Managing Director of Tata Chemicals said, “I am delighted at the speed and smoothness with which this deal was completed. The company’s global scale, spread and presence in natural soda ash will be of great strategic advantage to us in the years ahead.”

“We will now have in the Green Valley Basin in Wyoming for which we have admired the General Chemical”, added Homi. Khusarokhan has also informed to media that the deal has been finalised at USD1,005-million for which company has arranged the two sorts of loan, bridge loan and External Commercial Borrowing (ECB) programme on the competitive rate.

Under ECB program, Tata has credited $500-million for 6.3 years tenure while through bridge loan; Tata has debt $350-million for a six-month period. A series of banks are providing the bridge loans include ABN Amro, HSBC, Standard Chartered, Calyon Bank, Rabo and Mizuho.

Now, Tata has the debit –equity ratio of 1:1.4 that is expected to come down to 1:1.1 by the end of this year, as per company’s expectation.

‘The formalities of rest of the process would be completed in few months’, as TCL MD informed to the media.

With the acquisition of General Chemicals, TCL has now manufacturing locations in four continents and access to consumers around the world, including newly entered markets like North America, Latin America and certain markets in the Far East.

This was the second biggest acquisition of TCL as before this TCL has overtook Brunner Mond Group of Companies in 2005-06 that was leading producer of Soda Ash with a presence in the UK, Netherlands and Kenya.