Global logistics company Brambles Industries Limited has finalised the sale of its CHEP India pallet distribution business to Indian returnable packaging services provider LEAP India Private for an enterprise value of INR 7,150 million (US$85 million).
Brambles said the sale to LEAP India Private was completed on Wednesday, consistent with the original announcement that it would be completed in the first quarter of 2025.
When it announced the sale on 11 November, Brambles said it expected to recognise a profit on sale of about US$25 million, which would be treated as a significant item, subject to final closing adjustments and after transactions costs and taxes.
It said cash proceeds from the transaction of about US$75 million would be used to reduce debt and transaction did not affect the 2025 financial year outlook provided with the release of the results for the 2024 financial results.
At the time, CEO Graham Chipchase said Brambles had made good progress in establishing many of the fundamental elements that support customer and shareholder value creation from pooling when it entered the Indian market more than a decade ago.
“However, creating meaningful value from further investment in CHEP India, requires a long-term timeframe,” Chipchase said in an ASX announcement.
“The consolidation of CHEP India into LEAP’s existing equipment pooling operations provides opportunities for efficiencies and a strengthened customer offering in this market over the long term.
“Accordingly, this transaction reflects our disciplined approach to capital allocation and recognises the outstanding work the CHEP team in India have done in establishing a strong foundation and a valuable business in what is a large but complex and still early-stage market for pooling services.
“We will continue to review the development and investment attractiveness of what is a large geopolitically important market in India over the long term as part of our regular strategic reviews.”
At 12:20 pm AEDT (1:20 am GMT) Brambles (ASX: BXB) were trading a A$19.65, down 18 cents (0.91%) on the day after ranging between $19.64 and $20.00, and capitalising the company A$21.17 billion.