OSLO-Norwegian fertilizer producer Yara International ASA (YAR.OS) agreed to acquire Tata Chemicals Ltd.’s (500770.BY) Indian urea business for $400 million to strengthen its position in the world’s second-largest fertilizer market.
The acquisition included the Babrala urea plant in Uttar Pradesh with a production capacity of 700,000 tons of ammonia and 1.2 million tons of urea a year, as well as Tata Chemicals’ local distribution business, Yara said on Wednesday. The acquisition was agreed on a debt and cash-free basis, it said.
Yara, in which the Norwegian state has a 36% stake, has operated in India for more than two decades, mainly in the west and south. Through its presence in the populous northern state of Uttar Pradesh, the company is increasing its market footprint to accelerate growth. India has a strong population growth and a huge potential to improve agricultural productivity, Yara said.
The Babrala plant, commissioned 1994, is India’s most energy efficient plant, on par with Yara’s most efficient facilities, Yara said.
“This acquisition represents another significant step in our growth strategy, creating an integrated position in the world’s second-largest fertilizer market,” said Yara Chief Executive Svein Tore Holsether.
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