Tata Chemical Ltd.'s board approved the sale of its urea business to Yara Fertilisers India Private Ltd. for Rs 2,670 crore.
The business of sales and distribution of urea and other customized fertilisers made in the Babrala, Uttar Pradesh will be transferred to Yara, Tata Chemicals said in its press release.
The urea business had turnover of Rs 2,301 crore, and accounted for 21.2 percent of the overall turnover in the financial year 2015-16, the company added.
The divestment of the urea business by Tata Chemicals will unlock value for the company, strengthen its balance sheet and will help to pursue growth potentials and opportunities inline with its strategic directions.Tata Chemicals' Press Release
The sale will take place on a lump sum basis and is subject to regulatory approvals, which is expected to take 9 to 12 months.
This deal does not include specialty products and complex fertilisers divisions. The company added that it will continue to own Paras, TKS and Daksha brands.
“India has strong population growth and increasing living standards, and significant potential to improve agricultural productivity,” Svein Tore Holsether, president and chief executive officer of Yara, said in a statement cited by Bloomberg News.
Tata Chemicals stock surged as much as 7.5 percent to Rs 500.4 after the announcement of the deal.
Also Read: Yara Buys Tata Chemical's Urea Plant in India for $400 Million
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