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Rallis India: Agrochemical Company

Rallis India, a subisidary of Tata Chemcials, has announced the acquisition of a majority stake of 53.5% in Metahelix Life Sciences (Metahelix), a seed research company. The acquisition is an all-cash deal of Rs 99.5 crore funded largely through internal accruals.

Rallis India will subscribe to an additional equity of Rs25 crore to increase its stake in Metahelix to 59.02%. Further, Rallis India will enhance its shareholding to 100% in Metahelix over a period of five years.

The acquisition is positive for Rallis India as it has taken place at reasonable valuations and is likely to be earnings accretive from FY2012. Additionally, the acquisition will complement Rallis India’s existing businesses and consolidate its position across the entire value chain of breeding, production and marketing.