In a landmark move that positions India’s midcap sector at the heart of the global green economy, Kolkata-based Tega Industries has announced the acquisition of Molycop, a century-old mining consumables giant, for an enterprise value of $1.5 billion. The deal, executed in partnership with Apollo Global Management, marks the largest US acquisition by an Indian company in three years and gives investors a rare gateway into the industrial infrastructure powering electrification and clean energy transitions.
Here’s a comprehensive breakdown of the deal and its broader implications.
1. Deal structure and financials
- Tega Industries will hold a controlling 77 percent stake in the special purpose vehicle (SPV) created for the acquisition, while Apollo Funds will own the remaining 23 percent
- The acquisition price reflects a multiple of approximately 8.6x FY25 EBITDA, significantly lower than Tega’s own trading multiple of 25x EBITDA and below peers like Metso and Orica
- Tega’s funding requirement stands at $361 million, including $248 million in equity and $113 million in debt, with an additional conditional payout of $120 million over 45 months
- The deal is expected to close by December 2025, subject to regulatory approvals and customary conditions
2. Strategic rationale and industrial exposure
- Molycop is a global leader in grinding media—steel and high-chrome balls and rods used in crushing and refining raw ores like copper, iron, gold, and bauxite
- These consumables are mission-critical for miners such as BHP, Anglo American, and Barrick, making Molycop a key player in the supply chain of the green economy
- As demand for metals used in batteries, solar panels, and electric vehicles surges, Molycop’s role becomes increasingly central to global decarbonization efforts
- The acquisition gives Tega a direct stake in the industrial backbone of clean energy infrastructure, from mining to processing
3. Global footprint and operational synergy
- Post-acquisition, the combined entity will operate across 26 manufacturing sites in over 40 countries, significantly expanding Tega’s global reach
- Molycop’s established presence in North America, Latin America, and Australia complements Tega’s footprint in Asia and Africa
- The merger is expected to unlock operational efficiencies, cross-selling opportunities, and technology integration across product lines
- Tega plans to leverage Molycop’s R&D capabilities to accelerate innovation in wear-resistant materials and digital mining solutions
4. Investor sentiment and market reaction
- Tega’s stock dipped 4 percent following the announcement, reflecting short-term concerns over debt load and equity dilution
- Analysts remain cautiously optimistic, citing long-term margin improvement potential and strategic value creation
- The acquisition is seen as a bold move for a midcap company, signaling ambition and global competitiveness
- Investors now gain exposure to a high-growth segment of the green economy through a listed Indian vehicle
5. Risks and execution challenges
- Molycop carries a debt load of approximately $1 billion, and Tega will need to manage leverage carefully post-deal
- Integration across geographies and cultures poses execution risks, especially in aligning operational standards and supply chains
- Regulatory approvals in multiple jurisdictions could delay timelines or introduce compliance hurdles
- Tega’s ability to maintain profitability while absorbing a large global asset will be closely watched by markets
Final takeaway
Tega Industries’ acquisition of Molycop is more than a cross-border buyout—it’s a strategic leap into the industrial engine room of the green economy. By securing a dominant position in mining consumables, Tega offers investors a unique blend of midcap agility and global scale. As the world races toward electrification, this deal could become a cornerstone in India’s industrial evolution—if executed with precision.
Sources: Economic Times
