ITC share price up on announcing ₹3,500 crore acquisition of Aditya Birla Real Estate's pulp & paper arm

The stock rose 0.67% to ₹412.5 apiece on the National Stock Exchange (NSE) at 10:16 am.

The pulp and paper unit, operated under the name ‘Century Pulp and Paper,’ along with assets, contracts, and employees, will be acquired by ITC on a slump sale basis based on the business transfer agreement.

Century Pulp and Paper, in Uttarakhand's Lalkuan, is a well-established player in the paper and pulp industry. In a March 31 exchange filing, ITC said it would add 4.8 lakh metric tonnes per annum to the company's paperboards and specialty papers business.

India is one of the fastest-growing markets in the world, with a demand for papers and paperboards rising at 6% to 7% per year, it added. Industries like FMCG, food services, pharmaceuticals, education & stationery, and quick service restaurants are expected to be the key growth drivers.

ITC said that Century Pulp and Paper would be a strong strategic fit with the company's paperboards and specialty papers business. The acquisition is expected to add significant scale and economies to the existing operations along with the potential for further expansion.

Reacting to the development, B Sumant, Executive Director of ITC, said, "The acquisition will strengthen the market standing of ITC’s Paperboards and Specialty Papers Business and engender new opportunities in the domestic and international markets. The acquisition aligns with the company’s strategy of driving the next horizon of growth in the paperboards and specialty papers business by expanding capacity at a new location considering that the existing facilities are already saturated."

The transaction is expected to close in around six months, subject to regulatory approvals.

The deal comes at a time when ITC's paper, paperboards, and packaging business faces tough competition from Chinese and Indonesian supplies in overseas markets and weak domestic demand.