Tega Industries to acquire Molycop in $1.48 bn deal, expanding mining reach

Tega Industries Limited, in collaboration with Apollo Funds, has entered a term sheet to acquire Molycop for approximately $1.48 billion, with the transaction anticipated to close by December 31, 2025, or early January 2026. Tega’s funding for the acquisition will include $248 million from equity instruments, such as preferential allotment and qualified institutional placements, and a debt infusion of approximately $112 million. The promoter family plans to contribute 150 crores to 200 crores through preferential allotment. A deferred contingent liability of $120 million is linked to the reopening of select closed mines where Molycop was a major supplier.

This strategic acquisition aims to position Tega Industries as a world leader in "critical-to-operate" consumables for the mining sector, expanding its product portfolio with Molycop’s grinding media. The combined entity is expected to achieve meaningful revenue and cost synergies, expanding EBITDA margins from 11.5% to 15% without additional fixed costs. Tega anticipates a consolidated return on equity of 18% and plans to reduce Molycop’s net debt to EBITDA ratio to less than 2.5x over four years, down from approximately $1 billion in current debt to $780 million from day one.

The integration will focus on aligning organizational structures, harmonizing systems, and fostering a unified culture, with a primary goal of unlocking revenue synergies and enhancing customer engagement. Molycop’s high-chrome cast media segment is projected to grow by 20%, while its forged media business is expected to grow by 5% to 5.5% over the next three years.