Shares of Grasim Industries rose 0.9 percent after the Aditya Birla group said it would buy Canadian pulp maker Terrace Bay Pulp.
The acquisition is routed through a special purpose vehicle AV Terrace Bay Inc, in which Grasim would hold a 40 percent interest in and Thai Rayon Public Co Ltd, Thailand, the balance.
According to media reports, Grasim Industries will contribute $44 million to the SPV’s equity of $110 million.
Terrace Bay Pulp is a paper grade pulp mill in North America, Grasim said in a notification to the stock exchanges.
“The acquisition of the Terrace Bay Mill and its subsequent conversion into a dissolving grade pulp mill is a major strategic move…. To sustain ongoing growth, we have an integrated business model, spanning the entire value chain from plantation to pulp to fibre,” Aditya Birla Group chairman Kumar Mangalam Birla was quoted as saying in the Times of India.
Grasim is a global leader in viscose staple fibre business and rayon grade pulp, which Terrace Bay Pulp makes, is a raw material for this.