UPL spins off specialty chemical business, raises $500 million in divestment

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UPL (formerly United Prosperous) has spun off Specialty Chemical on the basis of a slump sale as a going concern to wholly owned subsidiary UPL Specialty Chemicals for Rs.3,752 crore.

The international crop protection sector has been transferred to UPL Corporation, Cayman.

It has separated global seed business under Advanta Enterprise and India crop protection business and digital business under UPL Sustainable Agri Solutions.

The company raised $500 million through the sale of minority stakes in Advanta Enterprises (13.3 percent) and UPL SAS (9.1 percent) to acquire global investment firms Abu Dhabi Investment Authority, KKR and Brookfield at a significant valuation premium to the listed parent company UPL, she said. company

The reorganization of the business is expected to be completed within 3-4 months.

The specialty chemical business consists of manufacturing ingredients used in the crop protection industry, pharmaceuticals, paints, textiles, mining, flavors and fragrances, lubricants, water treatment, personal care, and petroleum and oil field products.

The separate specialist business recorded revenue of Rs. 16,090 crore (includes inter-segment reporting) in FY23. The net asset value will be Rs. 3,572 crore.

The decision to separate the specialty business facilitates better value creation for stakeholders, allows for a differentiated play in the fast-growing agrochemical and specialty chemicals markets and in expanding the specialty chemical business at a faster pace.

The company said it will also accelerate growth in its B2B active ingredient manufacturing business and help achieve better operational efficiencies.

After the transfer is complete, the specialty chemicals company will supply the active ingredients to UPL and its subsidiaries with UPL Corp providing formulations for exports and UPL SAS supplying formulations for domestic sales.