Max India selling its films business to German firm
11 September 2012
Max India is selling its 22-year-old biaxially oriented polypropylene film unit, Max Speciality Films, to German company Treofan for an enterprise value of Rs540 crore as part of the strategy to focus on its core businesses of healthcare and insurance.
''It was always a tough decision for us to divest the oldest business in our portfolio,'' Analjit Singh, chairman of Max India, said in New Delhi. The move is in line with the Max India's focus on ''service-oriented businesses'', he added.
"The offer from Treofan is subject to financing, a material adverse change clause, confirmatory due diligence, execution of mutually satisfactory sale and purchase agreements, management retention, formal approval from Treofan's advisory board and receipt of regulatory and corporate approvals," said Max India in a press release.
The biaxially-oriented polypropylene (BOPP) unit, is one of Max India's oldest businesses. Its products are used in the packaging, label and textile industries. In the last fiscal year, the company posted revenue of Rs703 crore, up 77 per cent from the previous year.
Over the years, the company has divested many of its businesses, including pharmaceuticals, telecom and electronics, but the BOPP unit always remained part of its portfolio.
"It was an emotional decision for me personally, but the board and management rightly decided that it made good business sense to focus on our portfolio of service-oriented businesses of life," said Singh.