Tega Industries, in partnership with Apollo Global Management, is set to acquire Molycop from American Industrial Partners (AIP) for an enterprise value of $1.5 billion. This acquisition marks a significant move for Tega Industries, coinciding with its 50th anniversary, and is poised to transform the company into a leading global supplier of consumables for the mining, mineral processing, and material handling industries.

Strategic Rationale

The acquisition of Molycop is expected to significantly strengthen Tega Industries' global footprint and market position. Molycop, a century-old company, is a prominent supplier of grinding media and chemicals essential for mineral extraction, particularly for copper and gold. With a presence in over 40 countries and serving more than 400 mines, Molycop brings a strong customer base and manufacturing expertise to the combined entity. Tega Industries, established in 1976 and headquartered in Kolkata, is known for its innovative product portfolio and operates in over 92 countries. The combined scale and complementary product offerings are expected to accelerate innovation, expand market reach, and enhance the capabilities of both companies in serving the mining industry worldwide.

Financial Details

The combined revenue of Tega and Molycop in FY25 was reported to be $1.73 billion (₹15,207 crore), with an EBITDA of $217 million (₹1,906 crore). Molycop's revenue for the 12 months ending June 2025 was $1.54 billion, with an EBITDA of $172 million. Tega Industries will acquire a 77% controlling stake in Molycop, while Apollo Global Management will hold the remaining 23%. Tega's funding requirement for the transaction is $361 million, including $248 million in equity and $113 million in debt. The company will also make a conditional payment of $120 million within 45 months. The board of Tega Industries is scheduled to meet on September 13 to discuss fund-raising options.

Operational Synergies

Upon completion of the deal, the combined entity will operate 26 manufacturing sites globally, including Molycop's 13 facilities and three joint ventures. This expanded network is expected to enhance operational efficiency and market penetration. Tega's existing footprint in Europe, West Asia, Africa, and Latin America will be complemented by Molycop's strong presence in North America. The consortium plans to focus on integration over the first two years, leveraging complementary product portfolios to deliver comprehensive mill optimization solutions for global clients.

Market Reaction

Despite the announcement of the acquisition, Tega Industries' shares experienced a decline of up to 4% in Mumbai on Thursday. This drop reflects concerns about Molycop's high debt and potential equity dilution for Tega as it plans to raise funds. However, analysts suggest that the deal will strengthen Tega's global footprint and offer margin improvement potential in the medium term.

Management Commentary

Mehul Mohanka, MD and Group CEO of Tega, described the acquisition as a "momentous occasion" that will accelerate innovation, expand market reach, and enhance the company's capabilities in serving the mining industry globally. Gaurav Pant, Partner at Apollo, noted that the partnership would enable further investment in technology and capabilities. Kim Marvin from AIP expressed confidence that the business would be "in excellent hands" under Tega's leadership.

Deal Completion

The transaction is expected to be completed by December 31, 2025, subject to regulatory approvals and customary conditions. Once the deal is finalized, Tega Industries will emerge as the controlling shareholder, with Apollo Funds holding a significant minority equity stake.