France's Saint Gobain to acquire Electrotherm`s ductile pipes biz

France-based Saint Gobain, a global leader in construction, building materials and glass, has entered into binding agreements with Ahmedabad's Electro-therm (India) Limited to acquire latter's ductile iron pipes (DI pipes) business for Rs 950 crore.

The French major will also buy 100 per cent stake in a Electrotherm's subsidiary that runs the pipes business and pay additional value of working capital at the time of deal closure.

As per the filing to the BSE, India's largest manufacturer of induction melting furnace and refining equipment, Electrotherm, has executed binding agreements pursuant t to which Saint Gobain Pour La Construction SAS, a unit of Saint Gobain, will acquire Electrotherm's ductile iron pipes business for Rs 950 plus the value of working capital at closing.

"This transaction will enable Electrotherm to focus on its core businesses of engineering and steel and also to reduce debt," said Avinash Bhandari, joint managing director, Electrotherm (India) Limited.

"We are pleased that our ductile iron pipe business will be transferred to one of the world’s leading building materials companies and the global leader in ductile iron pipes. This transaction signifies the growing importance of India for global players. Our facilities will allow Saint Gobain to cater to domestic and international markets,” he added in a statement issued by the company.

The transaction will be subject to the terms and conditions as set out in the binding agreements entered into by the parties. KPMG Corporate Finance was the exclusive financial advisor to Electrotherm. Electrotherm diversified into steel manufacturing (long steel products and ductile iron pipe) in 2005.