New Delhi: ITC Ltd has sought the CCI's approval to acquire the pulp and paper business of Aditya Birla Real Estate Ltd (ABREL) for Rs 3,498 crore."The proposed transaction refers to the sale of the target business (paper and pulp manufacturing business of ABREL) to the acquirer (ITC Ltd), as a going concern, in accordance with the business transfer agreement executed between the parties," according to a notice filed with the Competition Commission of India (CCI).
Established in 1984 at Lalkuan (Nainital, Uttarakhand), pulp and paper undertaking Century Pulp and Paper (CPP) of ABREL is a well-established player in the Indian Paper industry with an installed capacity of 4.8 lakh metric tonnes per annum.
According to ITC and ABRE, the "proposed transaction does not raise any competition concerns within the relevant markets as the market is highly competitive, and will not cause any appreciable adverse effect on competition in the relevant markets", the CCI notice said.
In March, ABREL announced that its board approved the execution of the business transfer agreement for the divestment of pulp and paper undertaking situated in Lalkuan, Uttarakhand, by way of a slump sale to ITC Ltd."The transfer of the business will be for a lump-sum cash consideration of Rs 3,498 crore, to be paid by ITC to ABREL," the real estate firm said.
The divestment of the pulp and paper undertaking is a value-unlocking exercise. It will further enable the company to pursue growth opportunities in its core business - real estate, the company added.Kolkata-headquartered ITC has said its paperboards and packaging segment is expected to continue generating free cash flow going forward. During FY20-24, the segment generated a free cash flow of RS 4,000 crore.
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