ITC Seeks CCI Approval to Acquire Aditya Birla Real Estate's Pulp & Paper Business for ₹3,498 Crore
New Delhi: ITC Ltd has formally sought the approval of the Competition Commission of India (CCI) to acquire the pulp and paper business of Aditya Birla Real Estate Ltd (ABREL) for a substantial amount of ₹3,498 crore. The notice filed with the CCI outlines the details of the proposed transaction, which involves the sale of the target business (the paper and pulp manufacturing business of ABREL) to ITC Ltd as a going concern, in accordance with the business transfer agreement executed between the parties.
Established in 1984 at Lalkuan (Nainital, Uttarakhand), the pulp and paper undertaking of ABREL, known as Century Pulp and Paper (CPP), is a well-established player in the Indian paper industry. The facility has an installed capacity of 4.8 lakh metric tonnes per annum, making it a significant player in the market.
According to the statements from ITC and ABREL, the proposed transaction is not expected to raise any competition concerns within the relevant markets. The market is highly competitive, and the transaction will not cause any appreciable adverse effect on competition in the relevant markets, as stated in the CCI notice.
In March, ABREL announced that its board had approved the execution of the business transfer agreement for the divestment of the pulp and paper undertaking located in Lalkuan, Uttarakhand. The divestment will be conducted through a slump sale to ITC Ltd. The transfer of the business will involve a lump-sum cash consideration of ₹3,498 crore, to be paid by ITC to ABREL.
The divestment of the pulp and paper undertaking is seen as a strategic move by ABREL to unlock value and focus on its core business, real estate. This decision is expected to enable the company to pursue growth opportunities in the real estate sector, which remains a key area of focus.
Kolkata-headquartered ITC has expressed confidence in the future of its paperboards and packaging segment. The company expects this segment to continue generating free cash flow. During the fiscal years 2020-2024, the segment generated a free cash flow of ₹4,000 crore, highlighting its financial strength and stability.
