Max India is all set to sell its biaxially oriented polypropylene (BOPP) film division, Max Speciality Films (MSF), to German company Treofan for Rs5.4bn ($97m).
The decision to divest is in line with Max India Group's strategy to focus on its other businesses.
Analjit Singh, Max India chairman, said it was a tough decision for the company to divest the oldest business in its portfolio.
"It was an emotional decision for me personally, but the Board and Management rightly decided that it made good business sense to focus on our portfolio of service oriented businesses of life," Singh added.
The takeover by Treofan will provide MSF with access to global customers and is expected to elevate the business to the growth trajectory.
Through the divesture, Max India will concentrate on its service focused businesses and has several options to invest in its growth with the additional funds available.
According to Max India, the Treofan offer is subject to financing, a material adverse change clause, confirmatory due diligence, carrying out mutually satisfactory sale and purchase agreements, among others.
MSF has a BOPP capacity of about 50,000 tons per annum (TPA) and manufactures specialty BOPP films, including multilayer white opaque films, ultra high barrier metalised plain films and leather finishing foils.
The company's products are used in food packaging, overwrapping, consumer products, labels and textile industries.