Sudarshan Chemical has Finalized a Definitive Agreement to Acquire Heubach Group.

Sudarshan Chemical Industries Limited (SCIL) announced today that it has entered into a definitive agreement with Germany-based Heubach Group for its acquisition, structured as a combination of an asset and share deal.

This strategic acquisition will create a global pigment leader by combining SCIL’s operations and expertise with Heubach's advanced technological capabilities.

Following the acquisition, the merged company will offer an extensive pigment portfolio of high-quality products and will have a strong presence in key markets such as Europe and the Americas. This move will significantly enhance SCIL's product offerings, providing access to a diverse customer base and an expanded global footprint across 19 sites. The combined entity will be led by Mr. Rajesh Rathi, supported by a high-performing management team known for its strong execution skills and technical expertise.

The Heubach Group, with a 200-year legacy, became the world’s second-largest pigment producer after its merger with Clariant in 2022. In FY21 and FY22, Heubach generated over a billion euros in revenue, with a robust global presence, particularly in Europe, the Americas, and the APAC region. However, the Group has faced financial difficulties in recent years due to rising costs, inventory challenges, and high interest rates. SCIL's acquisition aims to address these issues through a clear turnaround strategy.

Commenting on the transaction, Mr. Rajesh Rathi, Managing Director of SCIL said “We are delighted with this transaction that brings together two businesses that will cater to major global markets. We will carefully integrate these two companies to create a truly global pigments company, with Frankfurt remaining a strategically important location. SCIL is known for its agility and efficiency, and we will embed this culture throughout the combined company to make it one of the most customer-centric and profitable pigment companies.”

Bram D’hondt from Heubach, said “By joining hands with SCIL, we aim to reclaim our 200+ years of legacy of serving customers with high quality products. Together, we will shape the future of the pigments industry by building on the ethos of customer centricity and product excellence. Our combined capabilities will enable us to serve our customers better. We look forward to working with SCIL as we enter this next chapter.”

The integration will center on a culture of agility and customer focus. The strategic and financial benefits of this combination are as follows:

1. Customer-Centric Company (Sevā): Following the acquisition, SCIL aims to become the preferred supplier for customers across the globe. With a comprehensive product portfolio spanning various segments and applications, the company will be well-positioned to offer top-tier products. SCIL’s R&D and innovation capabilities, coupled with its global supply chain network, will enable the company to efficiently meet customer needs.

   
   

2. Leading Global Pigment Player: The combined entity aspires to become the most valuable pigment company worldwide, with strong financials and profitability. This acquisition will expand SCIL’s product offerings, enhance its ability to serve global customers, particularly in Europe and the Americas, and provide a diversified asset base across 19 global locations.

   
   

3. Agile Organization: The integration will foster a culture of agility and operational efficiency, with significant synergies across functions. The company will implement best practices to maximize stakeholder value.

   
   

4. Leadership by World-Class Managers and Experts: SCIL will form a high-performing management team known for its strong execution and technical expertise. Post-acquisition, the combined company will be led by Mr. Rajesh Rathi, SCIL’s Managing Director.

Heubach boasts a broad, high-quality product portfolio, with a significant focus on specialty and customized products. It serves a strong customer base that includes global blue-chip companies, catering to industries such as coatings, plastics, inks, automotive, and electrical and electronics. With 17 manufacturing sites worldwide, Heubach provides stability during geopolitical and supply chain disruptions, ensuring long-term relationships with both suppliers and customers.

The acquisition is expected to close within 3-4 months, pending the satisfaction of customary closing conditions, including regulatory approvals and approval from SCIL shareholders.

Source: Sudarshan Chemical Industries