ABREL Sells Pulp & Paper Business to ITC for Rs 3498 Crore
Aditya Birla Real Estate Limited (ABREL) has divested its pulp and paper business to ITC for Rs 3498 crore, aiming to concentrate on its core real estate operations.
Pulp And PaperReal EstateAbrelItcDivestmentReal Estate PuneMar 31, 2025
The pulp and paper sector has been a part of ABREL's diversified portfolio, contributing to the company's overall revenue. However, the decision to divest this business unit is seen as a proactive step to streamline operations and capitalize on the burgeoning real estate market. ITC, a leading conglomerate with a strong presence in various sectors including consumer goods, tobacco, and hospitality, is set to integrate this acquisition into its existing operations, furthering its diversification strategy.
The deal includes the transfer of ABREL's pulp and paper manufacturing facilities, including the Bamanwada and Bhadrachalam mills. These facilities have a combined production capacity of over 500,000 metric tons per annum, making them significant assets in the Indian pulp and paper industry. ITC plans to leverage these assets to enhance its presence in the paper and packaging market, aligning with its long-term growth objectives.
For ABREL, the proceeds from this sale will be reinvested into its real estate projects, which are primarily focused on residential, commercial, and integrated townships. The company has a robust pipeline of projects across key markets in India, and the additional capital will enable ABREL to expedite project completions and deliveries. This strategic reallocation of resources is expected to drive stronger financial performance and solidify ABREL's position in the competitive real estate market.
The transaction is subject to customary regulatory approvals and is expected to be completed within the next few months. Both companies have expressed confidence in the deal, highlighting the mutual benefits and synergies that will arise from this strategic alliance. ITC CEO and Chairman Sanjiv Puri stated, 'This acquisition is a significant milestone in our journey to build a diversified and sustainable business. The addition of ABREL's pulp and paper assets will enhance our capabilities and contribute to our long-term growth plans.'
ABREL's CEO, Ajit Gulabchand, emphasized the importance of the sale in the company's strategic transformation. 'This divestment is a crucial step in our strategy to focus on our core real estate business. We are confident that the proceeds from this sale will drive our growth initiatives and enhance shareholder value,' he said.
The Indian real estate sector has shown strong resilience in recent years, driven by policy reforms, technological advancements, and increasing demand for quality housing and commercial spaces. ABREL's renewed focus on real estate is well-timed to capitalize on these positive trends, positioning the company for sustained growth and profitability.
In conclusion, the sale of ABREL's pulp and paper business to ITC for Rs 3498 crore is a strategic win for both companies. For ITC, it represents a valuable addition to its portfolio, while for ABREL, it marks a significant step towards becoming a more focused and efficient real estate player. The successful completion of this deal is expected to bring mutual benefits and contribute to the overall growth of the Indian corporate landscape.
Frequently Asked Questions
Why did ABREL sell its pulp and paper business to ITC?
ABREL sold its pulp and paper business to ITC to focus on its core real estate operations and optimize resource allocation. This strategic move aims to enhance growth potential and maximize shareholder value.
How much did ITC pay for ABREL's pulp and paper business?
ITC paid Rs 3498 crore for ABREL's pulp and paper business.
What are the key facilities included in the deal?
The deal includes the Bamanwada and Bhadrachalam mills, which have a combined production capacity of over 500,000 metric tons per annum.
What are ABREL's plans for the proceeds from the sale?
ABREL plans to reinvest the proceeds into its real estate projects, focusing on residential, commercial, and integrated townships across key markets in India.
What is ITC's long-term strategy with this acquisition?
ITC plans to integrate the acquired pulp and paper assets into its existing operations to enhance its presence in the paper and packaging market, aligning with its long-term diversification and growth objectives.
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