ABREL Announces ITC’s Acquisition of Century Pulp & Paper Business for Rs 3,498 Crore

Introduction

March 31, 2025: Aditya Birla Real Estate Ltd (ABREL) has signed an agreement to sell its pulp and paper business, Century Pulp and Paper (CPP), to ITC for Rs 3,498 crore in a strategic cash deal. The transaction is ABREL’s attempt to concentrate on its real estate business while allowing ITC to strengthen its position in the Indian paper industry.

ABREL’s Strategic Withdrawal from the Paper Industry

ABREL’s sale of CPP is its approach to intensify focus on its core business segments, specifically real estate. By divestment of the pulp and paper segment, the company wants to consolidate operations and utilize resources better to attain more growth in the real estate segment.

ITC’s Expansion in the Paper & Packaging Sector

For ITC, the deal is a game-
changer. CPP, set up in 1984 at Lalkuan (Nainital, Uttarakhand), is a market leader in the Indian paper industry with installed capacity of 4.8 lakh metric tonnes per annum. According to ITC, the deal will have a number of advantages, including:

Scale & Economies of Operations –

The merger of CPP’s operations will further strengthen ITC’s paper business, bringing in large-scale production capacity and efficiency.

Strategic Location Advantage –

The closeness of the plant to raw material sources and large markets will allow ITC to optimize supply chain management and improve customer servicing.

Capacity Expansion Potential –

ITC would take advantage of the existing infrastructure to further increase production capacities and service increasing demand in the paper and packaging segments.

Effect on the Indian Paper Industry

ITC’s acquisition of CPP is a milestone for the Indian paper and pulp industry. As growing concern for sustainability and environment-friendly packaging drives demand for the same, ITC’s increased capacity will satisfy the growing market demands. The acquisition also reinforces ITC’s market leadership, providing it with a competitive advantage.

Future Outlook

As ABREL is concentrating on real estate and ITC seeking to diversify its paper and packaging business, this deal represents strategic diversification in the portfolios of the two companies. The greater visibility of ITC in the paper segment will benefit in the long run, more so in the packaging segment, which is experiencing improved demand with e-commerce growth and growth in FMCG.

The Rs 3,498 crore deal not only reshapes the competitive dynamics of the paper sector but also consolidates ITC’s push for high-growth and sustainable businesses. Industry insiders are expecting the deal to unlock value for both the companies while driving operating efficiencies.

Frequently Asked Questions (FAQs)

Why did ABREL sell Century Pulp & Paper to ITC?
ABREL sold CPP to enable it to concentrate on its real estate core business and simplify for future growth.
How much money ITC invested in buying CPP?
ITC bought Century Pulp & Paper from ABREL for Rs 3,498 crore.
What are the advantages of the acquisition to ITC?
The acquisition adds to the manufacturing capability of ITC, gives locational advantage, increases supply chain efficiency, and facilitates future growth in the paper and packaging segment.
What is the production capacity of Century Pulp & Paper?
The installed production capacity of Century Pulp & Paper is 4.8 lakh metric tonnes per year.
Where is Century Pulp & Paper situated?
The plant is situated at Lalkuan, Nainital, Uttarakhand.
How will the acquisition influence the Indian paper sector?
The acquisition makes ITC stronger in market position, enables it to meet growing demand, and helps the industry move towards sustainable paper and packaging solutions.
Will ITC increase Century Pulp & Paper’s capacity?
ITC has shown indications of future capacity expansion to achieve increasing demand.
What will ABREL do after divesting its paper business?
ABREL will focus on its real estate and property development business.
Is there alignment of this acquisition with ITC’s sustainability goals?
ITC is a green growth believer, and the acquisition enables it to increase its green paper and packaging offerings.
Can I read more industry news on such developments?
You can keep reading our blog for more news on business strategy, corporate mergers and acquisitions, and market trends.

Conclusion

ABREL’s withdrawal from the pulp and paper sector and ITC’s strategic takeover of CPP signal a general trend of corporate restructuring and consolidation in the industry. As ITC consolidates CPP’s operations, the Indian paper sector is set for gigantic strides forward, into a leaner and greener future.

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