Aditya Birla Group Agrees to Buy Columbian Chemicals

Aditya Birla Group, controlled by Indian billionaire Kumar Mangalam Birla, said today it agreed to buy Columbian Chemicals Co., a U.S. carbon black manufacturer.

Birla will share more information about the acquisition at a press briefing at 4 p.m. local time in Mumbai today, according to an e-mailed statement from the company. This is the Indian group’s first major acquisition in the carbon black industry, it said without providing the cost of the deal.

The price for Marietta, Georgia-based Columbian, the world’s third-largest maker of the material with a market share of about 9 percent, may be about $800 million, one person with direct knowledge of the matter said on Jan. 20. The top three companies jointly account for about a third of the world’s carbon black capacity, according to a Standard & Poor’s report in October.

The Birla Group is the world’s fourth-largest producer, with operations spread across four units including Alexandria Carbon Black Co. in Egypt, Hi Tech Carbon, a division of Aditya Birla Nuvo Ltd. in India, Thai Carbon Black Public Co. in Thailand and Liaoning Birla Carbon Co. in China, according to its website.

Carbon blacks are finely divided forms of the element derived from the incomplete combustion of natural gas or petroleum oil and used to improve the durability of tires, paints and plastics.

$600 Million Purchase

DC Chemical Co., a South Korean maker of petrochemicals and solar-power components, and One Equity Partners LLC, the buyout arm of JPMorgan Chase & Co., jointly bought Columbian Chemicals for about $600 million from Phelps Dodge Corp. in 2006. One Equity agreed to acquire DC Chemical’s 67 percent stake for about $150 million in January 2009.

Columbian Chemicals operates in 11 countries including the U.S., Canada, Brazil, Germany, Spain, South Korea and China, according to its website.

One Equity, established in 2001, manages $8 billion of investments for New York-based JPMorgan in direct private-equity transactions, according to its website.

To contact the reporters on this story: Abhishek Shanker in Mumbai at ashanker1@bloomberg.net; George Smith Alexander in Mumbai galexander11@bloomberg.net.

To contact the editors responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net; Jeff St.Onge jstonge@bloomberg.net

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