ITC Ltd. has announced that it will buy Aditya Birla Group‘s pulp and paper business for a staggering Rs 3,500 crore. The deal is likely to be completed in the next six months.
The transaction will increase ITC’s current production capacity of over 1 million metric tonnes a year by an additional 480,000 metric tonnes yearly. The acquisition will enhance ITC’s market position and open up new growth opportunities in the domestic and international markets, said B Sumant, Executive Director, ITC.
This deal is well-timed when ITC’s paperboards, paper, and packaging business has been facing issues of soft domestic demand and stiff competition from cheap Chinese and Indonesian imports. Also, the wood price surge has weighed on profit margins, and hence strategic consolidation has become imperative.
The deal is pending regulatory approvals, including clearances from the Competition Commission of India (CCI) and the transfer of land leases. After completion, ITC hopes to utilize the assets acquired to serve local and export markets, thus expanding its global presence.
Experts believe that this acquisition is a smart move by ITC to strengthen its position in the Indian paper industry, which has been struggling with rising raw material costs and unpredictable global trade. By bringing in Birla’s pulp and paper know-how, ITC can reduce its dependence on external suppliers and boost its competitive edge.
With this strategic acquisition, ITC reaffirms its commitment to strengthening its paper and packaging portfolio while navigating the evolving challenges of the global paper market.
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