Jewellery company Rajesh Exports Ltd on Monday said that it has bought Valcambi, the world’s largest gold refining company, in an all-cash deal worth $400 million ( Rs 2560 crore).
The company was selected after a global search by Valcambi’s existing owners led by Newmont Mining Corp, the world’s largest gold jewellery maker said.
The deal will help it secure raw material supplies and will add to earnings per share, the company said.
India is the world’s biggest consumer of gold, with annual demand hovering around 900 tonnes per year.
Commenting on the acquisition, Rajesh Exports Ltd Chairman Rajesh Mehta said: "The coming together of REL and Valcambi would expand the global gold business and would prove very productive for the future global plans of REL group. We will seamlessly integrate Valcambi into REL group and would continue with the professional and globally acclaimed management of Valcambi."
"On a theoretical basis Valcambi is capable of supplying the entire gold requirement of India. This acquisition will add significantly to the revenues and profitability of REL group during the coming years," he added.
The company said that with Valcambi acquisition, REL will become an integrated player covering precious metal refining and gold jewellery making.
On the deal, Valcambi CEO Michael Mesaric said: "The coming together of REL and Valcambi would ensure that Valcambi improves on its global share of gold business, by opening up new markets in India, Middle East and China." The company said Grant Thorton assisted Rajesh Exports in due diligence and Credit Suisse is part financing the acquisition through a long term debt.
Rajesh Exports said for the last three years on an average per year Valcambi generated revenues in excess of $38 billion (Rs 2,36,500 crore) by refining and selling 945 tons of gold and 325 tons of silver per year, which is more than India's average annual gold demand.
Updated Date: Jul 27, 2015 18:25:21 IST