ITC Approaches CCI for Approval to Acquire ABREL Pulp Unit Worth ₹3,498 Crore
ITC Approaches CCI for Approval to Acquire ABREL Pulp Unit Worth ₹3,498 Crore
Introduction
ITC Ltd. has approached the Competition Commission of India (CCI) seeking approval to acquire the pulp and paper business of Aditya Birla Real Estate (ABREL) for a consideration of ₹3,498 crore. The proposed acquisition will be carried out through a business transfer agreement.
Factual Background
The transaction involves the transfer of ABREL’s pulp and paper manufacturing business to ITC as a going concern.
The business, Century Pulp and Paper (CPP), was set up in 1984 at Lalkuan, Nainital (Uttarakhand), and has become a major player in India’s paper industry with an installed capacity of 4.8 lakh metric tonnes per annum.
Procedural Background
- ITC has filed the required notice with the CCI.
- The Commission will assess whether the proposed deal may result in an appreciable adverse effect on competition in the relevant market under the Competition Act, 2002.
Contentions of the Parties
- ITC’s Stand: The acquisition will strengthen ITC’s paperboards and packaging segment, which generated ₹4,000 crore free cash flows between FY20–FY24. The move is aligned with ITC’s ₹20,000 crore expansion strategy unveiled by Chairman Sanjiv Puri at the 2025 AGM.
- ABREL’s Stand: The divestment is a value-unlocking exercise, enabling ABREL to refocus on its core real estate business and explore new growth opportunities.
Reasons for the Acquisition
1. Strategic Growth: Supports ITC’s scaling of core businesses, particularly its packaging vertical.
2. Financial Strengthening: Ensures continuity of cash flow generation from an already profitable segment.
3. Business Realignment: Allows ABREL to redeploy capital into its real estate ventures.
Implications
- If approved, the deal will consolidate ITC’s leadership in paperboards and packaging, a critical segment supporting its FMCG and allied businesses.
- For ABREL, the move represents a strategic exit from pulp and paper to sharpen its focus on real estate.
- The transaction may signal further consolidation trends in India’s paper industry.
Outcome / Status
- The acquisition remains subject to CCI’s approval.
