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GHCL acquires Dan River for $17.5 million
By agencies
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Wednesday, 28 December 2005, 20:30 IST
AHMEDABAD: Dalmia-owned textiles and soda ash maker GHCL Ltd has signed an agreement to acquire Dan River Inc, a leading textiles player in the U.S., for $17.50 million.
Through its international subsidiary, GHCL, will acquire over 90 percent of Dan River on January 2, the company Chairman, Sanjay Dalmia said. The acquisition of Dan River enables GHCL to enter into existing marketing arrangements to the tune of $250 million and the U.S.-based company will be used primarily as a marketing arm.
Dalmia said, We plan to outsource most of the production to units in India, Pakistan and China and shut down several Dan River's production units in the U.S. By the end of next year, less than 20 percent of the production will take place in the U.S.
Dan River has an annual turnover of about $250 million and caters to mega retailers such as JC Penny, Wal-Mart, Linen & Things and Bed, Bath and Beyond. The acquisition was financed through its $70 million foreign currency convertible bonds issue that concluded earlier this year.