Mumbai: Indonesia-based Indorama Corp., led by the S.P. Lohia family, is in advanced talks to acquire the Haldia fertilizer unit of Tata Chemicals Ltd for upwards of Rs1,000 crore, two people aware of the development said.

Negotiations are currently in the final stages and an announcement is expected in the coming weeks, the two said on condition of anonymity. The deal will mark Tata group’s exit from the highly regulated fertilizer business.

In August last year, Tata Chemicals Ltd sold its urea plant in Babrala, Uttar Pradesh, to the Indian unit of Norway-based Yara International ASA for Rs2,670 crore. The Haldia unit, which manufactures phosphatic fertilizer, was not part of the Yara deal.

The people cited above described the transaction as part of Tata group’s overall strategy of exiting or capping investments in certain businesses.

An email sent to Indorama was not answered as of press time. A Tata Chemicals spokesperson said in an email, “Tata Chemicals does not respond to market speculations. As a company, we are always open to evaluating various options that could create maximum shareholder value."

Mint reported in June that the Tata group was looking at implementing a rationalization strategy aimed at paring debt and boosting profit margins by divesting business that are underperforming or not contributing to profits.

The board of group holding firm Tata Sons Ltd had in September 2016, when Cyrus Mistry was chairman, discussed a divestment plan for non-core businesses.

At the meeting, Ajay Piramal, an independent director on the Tata Sons board, even recommended forming a separate team to work on the divestment strategy.

Amit Chandra and Nitin Nohria, two other directors and nominees of Tata Trusts on the Tata Sons board agreed, and suggested starting a dialogue with private equity firms, Mint reported in June, citing minutes of the meeting appended as an annexure in the petition filed by two investment companies of the Mistry family at the National Company Law Tribunal. Mistry was ousted as Tata Sons chairman in October.

Tata Chemicals, the world’s second- largest soda ash maker, had capped its investment in the fertilizer segment and restructured operations of two overseas fertilizer plants. It is one of India’s largest producers of inorganic chemicals and fertilizers. Over the years, Tata Chemicals has expanded its operations to edible salt, phosphatic fertilizers, urea and cement. Its agri business includes crop nutrition, chemicals and pesticides.

For the Indorama group, a deal will reinforce its presence in India, especially the eastern region, where it has been strengthening its presence.

In September last year, Indorama Ventures formed an equal joint venture with Kolkata-based Dhunseri Petrochem Ltd to produce polyethylene terephthalate (PET) resins, a raw material used in the textile and plastics industries.

Dhunseri Petrochem’s PET resin business, with a 480,000 tonnes per annum plant in Haldia, was transferred to the newly formed company Dhunseri Petglobal Ltd, as per the agreement.

Mint reported in April that Indorama was in initial talks with The Chatterjee Group (TCG) to buy a stake in Haldia Petrochemicals Ltd, in which Tata group owns a 2.3% stake, along with larger shareholders such as The Chatterjee Group and Indian Oil Corp.