Tata Chemicals has started the year with a major soda ash acquisition that will take it to the global No 2 spot behind Solvay. The company has signed an agreement to acquire General Chemical Industrial Products’ 2.5m tonnes/year soda ash facility at Wyoming, US, for $1.01bn.
Tata’s current soda ash capacity is around 3m tonnes/year compared with Solvay’s 8m tonnes/year capacity. Tata has plants in India, the UK and Kenya. It had acquired UK’s Brunner Mond in the UK in 2006.
But the General Chemical deal, which will be financed through debt and equity, prompted Moody’s to place the Tata’s foreign issuer rating under review for possible downgrade.
Moody’s is concerned about uncertainties associated with the funding structure and the impact of the acquisition on the company’s consolidated financial profile. Also, given the size and operating profile of General Chemicals, the company could face integration challenges.