UPL to hive off specialty chemicals business to arm

Mumbai-based UPL Ltd, will hive off its specialty chemicals business on a slump sale basis to wholly-owned arm UPL Speciality Chemicals Ltd for ₹3,572 crore. UPL expects to close the transaction within 3 to 4 months of receiving shareholder approval. There will be no change in the shareholding pattern of UPL on account of the transaction.

The board of directors of UPL approved the restructuring on Friday, the company said in an exchange filing.

Specialty Chemical Business is involved in making ingredients used for crop protection, pharma, paints, textiles, mining, flavors and fragrance, lubricants, water treatment, personal care, petroleum, and oilfield products.

The restructuring will scale up the ‘Specialty Chemicals’ business at a faster pace by expanding in other high-growth sectors and also accelerate growth in the B2B AI Manufacturing business through more partnerships (the ability to work with partners outside of UPL group).

Post the transfer, the specialty chemicals business will supply active ingredients to UPL and its affiliates wherein UPL Corp supplies formulations for exports and UPL SAS supplies formulations for domestic sales.

The specialty business has registered revenue of ₹16,090 crore (including inter-segmental reporting) in FY’23. Net asset value will be ₹3,572 crore.