Channel: Companies

Tuesday, 8 February 2011
Tata Chemicals UK arm completes Cheshire Salt Buy
By Amanpreet bhatia

Tata the Indian group of Companies, well-known name worldwide has acquired one of the UK'S traditional brand names, British Salt. The deal is finalised for 93 million and has become part of Brunner Mond, which is a subsidiary owned by Tata Chemicals Limited (TCL) in the UK. TCL wholly owned subsidiary Brunner Mond has signed a binding agreement to acquire 100% stake in British Salt Ltd. UK which is subjected to requisite regulatory approvals and it will be entirely debt financed with no recourse to TCL.


Brunner Mond is the wholly owned subsidiary of Tata Chemicals based in Northwich, UK. It is the UK's only soda ash and sodium bicarbonate, calcium chloride and associated alkaline chemicals Producer. It plays an essential role in everyday life, being used in a variety of industries, from glass, detergents and biscuits to life-saving dialysis treatments and water purification. Brunner Mond was purchased by Tata Chemicals in 2006. The purchase of British Salt is likely to increase Brunner's Mond's manufacturing experience and will provide growth opportunities.


British Salt,based in Cheshireis the UK's leading manufacturer of pure dried vacuum salt products and enjoys a 50% market share in the UK. It also supplies the food industry and makes the grit used to de-ice the country's roads and runways in extreme weather conditions.


The company also owns brine wells in the UK with residual life of 50 years. The acquisition also provides an opportunity to secure long term brine supplies for Brunner Mond's operations. The acquisition gives Tata access to very strong brine supplies and also access to British Salt's facilities as it produces about 800,000 tons of pure white salt every year. Apart from manufacturing and supplying British Salt also have an active presence in gas storage business which has the potential to generate extra cash flows for the business.


The salt produced by British Salt is standard Pure dried Vacuum Salt which complies with British standard 998 for food use: The food industry not only re-packages this salt for table use, but also uses it in wide range of dairy products, snacks and other food products. Both British Salt and Brunner Mond has an excellent reputation and both will share their manufacturing and processing experience which will help in further growth of the company.


The acquisition by Tata Chemicals is in line with its strategy to deepen its presence in food and farm sectors. Tata Chemicals ltd has also decided to go further into food sector and has launched its I - Shakti brand of pulses and daals. Through this venture, the company hopes, it will encourage the local farmers to grow more pulses - the edible seeds of legumes, such as lentils and daals, which is the staple food for most of the Asian meals.


India's Tata Group is building a business reputation in the UK after some key acquisitions, including, Tetley Tea acquired in February 2000 for 271 million, steel manufacturer Corus Group in January 2007 for deal valued at USD 12.04 billion and Jaguar Cars and Land Rover in March 2008 for $2.3 billion.