DEAL BUZZ

Mumbai, March 30: International Paper (IP), the US-based paper and packaging company, is believed to be eyeing its second acquisition in India.

The buzz on the Street is that IP is hoping to strike a deal to acquire the paper business of B.K. Birla group company Century Textiles and Industries Ltd.

The speculation is that both the companies have started talks but this could not be confirmed. The paper business of Century Textiles is being valued at Rs 1,500 crore.

Century Textiles has a pulp and paper plant at Lalkua near Nainital in Uttarakhand. The rayon and paper grade pulp unit was established in 1984 and the second paper unit close to the pulp and paper plant, based on bagasse manufacturing, was established in 1995. The company also has a prime-grade tissue paper plant at Lalkua. The total capacity stands at over 1.80 lakh tonnes.

However, the Century Textiles stock did not react much to the speculation. On the BSE, the share ended marginally higher at Rs 368.60.

IP had stunned the Street last year by bagging Andhra Pradesh Paper Mills (APPM) from the Bangur group at an aggressive valuation.

It acquired APPM, which has an annual capacity of 2.50 lakh tonnes of uncoated freesheet paper, for an enterprise value of around $600 million. It bought the entire promoters’ 53.5 per cent stake in the company for $257 million (Rs 1,156 crore) and paid around Rs 279 crore to the sellers as a non-compete fee.

The US-based firm also came out with an open offer to acquire shares of APPM from minority shareholders for around Rs 468 crore.

Underscoring its interest in the low-cost and high demand Indian market, IP had priced its open offer at Rs 544 per share, a significant premium to the closing price of the AAPM scrip at that time.

IP has manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include uncoated papers and industrial and consumer packaging.