Mumbai: Carborundum Universal, flagship company of Murugappa group has announced thatit will acquire 84.14% stake in Russia’s Volzhsky Abrasives Works (VAW) for an undisclosed amount.
The company has entered into a binding Memorandum of Understanding for purchase of the stake in VAW, a leading producer of Silicon Carbide (SiC) with 65,000 tons per annum installed capacity.
The deal would be formally concluded as soon as the necessary clearances including an approval by Russian Federal Anti-monopoly Service are obtained and this is expected in July 2007, as communicated bythe company to the Bombay Stock Exchange (BSE).
Pursuant to this acquisition Carborundum Universal would bring to VAW its brands, market access, application engineering expertise and global management practices.
This would also help VAW to grow its bonded and refractory business. Besides the change in ownership is expected to benefit VAW’s customers, employees and the community in Volzhsky province, it added.
VAW also produces bonded abrasives and refractories and its sales in 2006 were to the tune of $54 million (Rs 216 crore). Carborundum Universal has operations in Australia, Canada, China, Middle East, the US and India.
Responding to this development, shares of Carborundum Universal were trading at Rs 161.30, up 4.03% on BSE in morning trade.