Ambanis get nod to take over German polyester firm
Wednesday, 11 August 2004, 19:30 IST
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FRANKFURT: Reliance Industries, India's largest private company, has finalised the takeover of a leading polyester producer in Germany with the European Commission giving its green signal this week. Once regarded as Germany's "corporate nugget", German specialty polyester manufacturing company Trevira's merger deal with Reliance was subject to clearance by the European Commission under the anti-trust regulations. The takeover was formalised Wednesday by Reliance's chief representative in Europe, Mohan Murti, who signed the relevant papers at the office premises of the law firm Hengler and Mueller in the country's business capital. Reliance, one of the largest polyester fibre and yarn players in the world, had earlier inked the Trevira sale agreement in Basel, Switzerland on June 23. Trevira is a leading German manufacturer with an annual capacity of 130,000 tonnes of polyester fibre and yarn produced at four locations in Europe - in Bobingen and Guben (Germany), Silkeborg (Denmark), and Quevaucamps (Belgium). Industry experts here say Reliance seems to have been enticed by Trevira's state-of-the-art research and development centre in Bobingen, billed as the "heart of polyester research." Over the years, Trevira has developed several important patents and technologies and the polyester produced by it has a wide range of applications, particularly in the automotive and home textiles industries. The company has a broad customer base and its products are widely used in the interiors of cars manufactured by the leading automakers in Germany as well as the German railways. "Trevira is a well-known brand not only in Europe but also internationally," Subodh Sapra, president of Reliance Industries, told IANS. Sapra, who has been designated as chairman of the board of Trevira, said Trevira would provide Reliance a strong foothold in Europe and enable it to cater to all market segments of polyester fibres and filament yarns worldwide. Trevira's knowledge base, Sapra believed, would complement Reliance's own research and development facilities, he said. "The synergy will provide comprehensive and innovative solutions for apparel and non-apparel applications of polyester to customers worldwide." Trevira, which was formerly part of the Farbwerke Hoechst group, was spun off by the latter during a major reorganization some years back and sold to an Indonesian group that failed to manage it successfully. Later, the Deutsche Bank took over the rein of the company and held it for three and a half years. According to Frankfurt-based analysts, the Deutsche Bank was keen to sell the ailing Trevira to a polyester company. Two potential companies were short-listed in the takeover race, one being Reliance and the other one South Korean company Nanya. The dice was, finally, cast in Reliance's favour. Sapra said Trevira's annual capacity of 130,000 tonnes and Reliance's own one million tonne capacity would make the latter the world's largest polyester fibre and yarn-producing firm. "Our strength lies in the integration and management of large-scale manufacturing facilities. The Deutsche Bank, clearly, recognised this and felt that we would be a good strategic partner," he said. Sapra did not reveal the financial terms of the takeover, saying that he was precluded from doing so under the non-disclosure agreement signed with the Deutsche Bank. However, unconfirmed media reports both in India and Germany put the figure at 80 million euros that would be used to settle the debts of a consortium of lenders.
Source: IANS
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