Rallis India acquires majority stake in Metahelix Life Sciences
December 9, 2010

Firms up presence in entire seeds value chain

Mumbai: Rallis India (Rallis), a subsidiary of Tata Chemicals, today, announced the acquisition of a majority stake of 53.5 per cent in Metahelix Life Sciences, a Bangalore-based seeds research company with a portfolio of seeds successfully commercialised over the last three years. The acquisition is an all-cash deal of Rs99.5 crore, funded largely through internal accruals.

'Seeds' has been identified as one of the key pillars for Rallis under its ‘Rallis Poised’ growth agenda. This is in line with the strategy of Tata Chemicals to offer the entire suite of agri-inputs for the benefit of the farming community. Having a strategic connect to agriculture, seeds will provide a value-creating proposition for future growth at Rallis. Metahelix Life Sciences is the company’s first inorganic foray in the seeds space, providing a strong platform in the entire value chain that comprises breeding, production and marketing of seeds.

Rallis will subscribe to an additional equity of Rs25 crore to increase its stake in Metahelix to 59.02 per cent on a fully-diluted basis. Furthermore, pursuant to the terms of the definitive agreements signed, Rallis will enhance its shareholding to 100 per cent in Metahelix over a period of five years.

Speaking on the occasion, V. Shankar, managing director and chief executive officer, Rallis, said, "This acquisition aims at predominantly driving the agricultural productivity and yield enhancement in the country. Farmer adoption of good hybrid seeds is rapidly growing, and with this new acquired strength, Rallis will be in a firm position to provide a trustworthy portfolio of seeds to the Indian farmers.”

The competencies of Rallis in terms of farmer relationships and channel partnerships would also leverage the offerings from Metahelix Life Sciences. The offerings will supplement the Rallis portfolio, and the robust distribution channel available through the Tata Kisan Sansar (TKS) platform will enable a wider reach. This also is an opportunity to drive the synergies that exist between Rallis and Tata Chemicals.

Elaborating on the business prospects, Mr Shankar added, “We believe that the revenues from the entity will exceed Rs1,000 crore cumulatively over a five-year period. The deal works out to twice the projected revenues of next year.”