CCI okays ITC-ABRE’s paper & pulp biz deal

The Competition Commission of India (CCI) greenlit on Tuesday ITC Limited’s acquisition of the paper and pulp manufacturing business of Aditya Birla Real Estate Limited (ABREL), clearing a key regulatory hurdle for the Rs 3,498-crore transaction.The approval covers the proposed transfer of ABREL’s pulp and paper undertaking at Lalkuan in Uttarakhand to ITC through a business transfer agreement. The divestment plan had been cleared by ABREL’s board in March this year and is now set to move into the execution phase following the antitrust watchdog’s clearance.Aditya Birla Real Estate had said earlier that the sale will allow the company to channel resources towards expanding its core real estate business. Managing Director R.K. Dalmia described the divestment as a strategic portfolio decision that unlocks value for shareholders and sharpens the company’s focus at a time when it is entering a phase of transformational growth. He added that the pulp and paper business had built a strong reputation for performance and sustainability, and that ITC was well placed to scale it further.Under the terms of the agreement, the consideration will be paid as a lump sum, subject to customary adjustments. The transaction remains contingent on other statutory and regulatory approvals, including shareholder consent.JM Financial acted as the exclusive financial adviser to ABREL on the deal, while AZB & Partners served as its legal counsel.For ITC, the acquisition will add to its paperboards and specialty papers portfolio, which already has a production capacity of over one million tonnes a year across four plants in Andhra Pradesh, Telangana, Tamil Nadu and West Bengal. ITC had been in competition with West Coast Paper Mills for the asset.The sale is also aimed at freeing up capital for the Aditya Birla Group, which has a wide presence across sectors such as metals, cement, financial services, retail and telecom, and has been stepping up investments in newer businesses including paints, jewellery retail and real estate.