SCIL Acquires Heubach Group to Form Global Pigment Leader

Sudarshan Chemical Industries Limited (“SCIL” or “Company”) today announced that it has entered into a definitive agreement with the Germany-based Heubach Group, on its acquisition in a combination of an asset and share deal.

This strategic acquisition will create a global pigment company, combining SCIL’s operations and expertise with Heubach's technological capabilities. 

Post-acquisition, the combined company will have a broad pigment portfolio of high-quality products and a strong presence in major markets including Europe and the Americas. It will enhance SCIL’s product portfolio, giving it access to customers and a diversified asset footprint across 19 sites globally. The combined company will be led by Mr. Rajesh Rathi and a high performing management team with quality execution skills and technical competency. 

The Heubach Group has a 200-year history and became the second largest pigment player in the world after its integration with Clariant in 2022. Heubach had over a billion euros in revenue in FY21 and FY22, with a global footprint especially in Europe, Americas, and the APAC region. The Group faced financial challenges over the past two years due to rising costs, inventory issues, and high interest rates. SCIL’s acquisition of Heubach will address these challenges with a clear turnaround plan. 

Commenting on the transaction, Mr. Rajesh Rathi, Managing Director of SCIL said “We are delighted with this transaction that brings together two businesses that will cater to major global markets. We will carefully integrate these two companies to create a truly global pigments company, with Frankfurt remaining a strategically important location. SCIL is known for its agility and efficiency, and we will embed this culture throughout the combined company to make it one of the most customer-centric and profitable pigment companies.”

Bram D’hondt from Heubach, said “By joining hands with SCIL, we aim to reclaim our 200+ years of legacy of serving customers with high quality products. Together, we will shape the future of the pigments industry by building on the ethos of customer centricity and product excellence. Our combined capabilities will enable us to serve our customers better. We look forward to working with SCIL as we enter this next chapter.”\

Crawford Bayley and Noerr are acting as legal counsel to Sudarshan and DC Advisory is acting as financial advisor.

Culture of agility and customer focus will be at the center of this integration. The strategic and financial benefits of the combination are as follows:

• A company with customer centricity (Sevā) at its heart: Post-acquisition SCIL envisages to become the supplier of choice for all customers. The company will have a wide product portfolio across segments and applications and it will be able to offer the best-in-class product portfolio to customers. SCIL’s R&D and innovation capabilities combined with the global supply chain network, will be an enabler for the company to serve customers efficiently.

• Most valuable global pigment player: The combined entity aims to become the most valuable pigment company in the world with great financial strength and profitability. The acquisition enhances SCIL’s breadth of product portfolio in global markets, gives it an opportunity to serve global customers, especially in Europe and Americas, and a diversified asset footprint across 19 global sites.

• An agile organization: The integration will create a culture of agility and efficiency, with significant synergies expected across functions. The combined company will implement best practices to maximize value for stakeholders. 

• Led by world-class managers and pigment experts: SCIL to create a high performing management team with quality execution skills and technical competency. The combined company will be led by Mr. Rajesh Rathi, SCIL’s Managing Director, after the close of the transaction. 

Heubach has a broad and high-quality product portfolio with a large percentage of specialties including customized products. It serves a strong customer base of global blue-chip customers with applications in coating, plastic, inks, automotive, electrical and electronics. Heubach has 17 manufacturing sites globally providing stability during any geopolitical and supply chain challenges, ensuring long-term relationships with suppliers and customers. 

The acquisition is expected to close in 3-4 months, subject to the satisfaction of customary closing conditions, including approvals from regulators and SCIL shareholders.