Sudarshan Chemical to acquire Germany-based pigment manufacturer for ₹1,800 cr

Sudarshan Chemical Industries (SCIL) has signed a deal to acquire Germany-based Heubach Group, the world’s second-largest pigment manufacturer, for ₹1,180 crore (€127.5 million). The deal will be executed through SCIL’s Netherlands-based subsidiary, Sudarshan Europe BV, which will acquire Heubach’s global pigment business, SCIL says in a post-market exchange filing.

The acquisition is anticipated to close within 3-4 months, pending customary closing conditions such as regulatory approvals, including that of the Competition Commission of India, and the approval of SCIL shareholders. Following the acquisition, SCIL would make an open offer for a 26% stake in Heubach Colorants, the Indian-listed subsidiary, in line with regulatory requirements.

The acquisition will encompass Heubach's businesses, including Heubach Colorants Germany GmbH, Heubach GmbH, Dr. Hans Heubach GmbH, and Heubach Group GmbH. It will also include 100% ownership of Heubach Holdings, a Luxembourg-based entity with investments in India and the USA. Crawford Bayley and Noerr will serve as legal counsel for Sudarshan, while DC Advisory will act as its financial advisor. The combined entity will be led by Rajesh Rathi, Managing Director of SCIL. According to Rathi, Frankfurt will remain a strategically important location for the new entity.

Heubach is a prominent player in the speciality chemicals industry, specialising in organic and inorganic pigments, dyes, dispersions, and anti-corrosion pigments. After acquiring Clariant's BU Pigments in 2022, it became the second-largest pigment company globally, generating over €1 billion in revenue in FY21 and FY22. However, Heubach GmbH filed for bankruptcy in Germany in April.

The acquisition will enable SCIL to leverage Heubach’s expertise in customised pigments and expand its presence across 19 global sites, enhancing its product portfolio in key markets, particularly in Europe and the Americas. SCIL aims to become the preferred supplier for its customers.

Ahead of the announcement, shares of Sudarshan Chemical Industries closed at ₹1,201.10 on the NSE today, up 15% from yesterday's close. Over the past year, the stock has surged 152%, significantly outperforming the Nifty index.