Sugar major EID Parry today announced acquiring a majority stake in GMR Industries, the agri-business arm of Hyderabad-based GMR Group, with purchase of minimum 65 per cent equity, currently worth Rs 145 crore.
For the transaction, EID Parry has entered into a definitive agreement with GMR Holdings Pvt Ltd, the companies said in a joint statement.
The two companies did not divulge any financial details, but based on GMR Industries' current market capitalisation of Rs 223 crore, a 65 per cent stake in the company would be valued at Rs 145 crore.
EID Parry, which is part of Chennai-based Murugappa Group, is a dominant player in the sugar industry and also has interests in bio-pesticides and nutraceuticals.
"GMR Group will divest a majority equity stake such that ... EID Parry would hold a minimum 65 per cent equity stake in GMR Industries. Post the open offer, GMR Group would become a minority shareholder in the company," the statement said.
GMR Industries owns and operates three fully integrated sugar complexes in Andhra Pradesh and Karnataka. The company is listed on the Bombay Stock Exchange and the National Stock Exchange.
According to the statement, the deal would mark EID Parry's entry into Andhra Pradesh and also consolidate its position as a leading sugar manufacturer in cane rich areas of north Karnataka.
EID Parry Chairman A Vellayan said the acquisition would strengthen its position as one of the leading sugar companies in India and increases the number of integrated complexes.
"It thus provides EID Parry a platform to tap the sugar markets other than Southern India," he added.
"The transaction is in line with GMR Group's overall strategy to divest its non-core assets and focus on its infrastructure and energy business going forward," the statement said.
Currently, GMR Group has significant interest in airports, energy, highways and urban infrastructure.
"EID Parry is one of the most respected and renowned sugar companies in India. We are confident that this development would be rewarding and beneficial for all stakeholders including the shareholders, farmers and employees of the company," GMR Group Chairman GM Rao said.
The definitive agreement was signed by Vellayan and GMR Holdings' Director K Balasubramanian in Chennai today. GMR Industries is a subsidiary of GMR Holdings.
Rothschild acted as the sole financial adviser to GMR Group on the transaction.