ITC Ltd — M&A Activity 2025

Mar 31, 2025

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31[st] March, 2025

The Manager The General Manager Listing Department Dept. of Corporate Services National Stock Exchange of BSE Ltd. India Ltd. P. J. Towers Exchange Plaza Dalal Street Plot No. C-1, G Block Mumbai 400 001 Bandra-Kurla Complex Bandra (East) Mumbai 400 051

The Secretary The Calcutta Stock Exchange Ltd. 7, Lyons Range Kolkata 700 001

Dear Sirs,

Acquisition of Pulp and Paper Undertaking of Aditya Birla Real Estate Limited

We write to advise that, pursuant to approval of the Board of Directors of the Company at the meeting held today i.e. 31[st] March, 2025, the Company has entered into a Business Transfer Agreement (‘BTA’) with Aditya Birla Real Estate Limited (‘ABREL’) for acquisition of ABREL’s pulp and paper business operated under the name of ‘Century Pulp and Paper’, along with the assets, liabilities, contracts, employees etc. (‘Undertaking’), as a going concern on a slump sale basis, subject to the conditions precedent specified in the BTA.

In the context of the above, enclosed please find the relevant pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with the SEBI Master Circular dated 11[th] November, 2024.

A copy of the Media Release being issued by the Company, along with a presentation in this regard, is also enclosed.

The Board Meeting commenced at 3.00 p.m. and concluded at 6.15 p.m.

Yours faithfully, ITC Limited

RAJENDRA Digitally signed by RAJENDRA KUMAR KUMAR SINGHI Date: 2025.03.31 SINGHI 20:00:46 +05'30'

(R. K. Singhi) Executive Vice President & Company Secretary

Enclosed: a/a

FMCG ⚫ PAPERBOARDS & PACKAGING ⚫ AGRI-BUSINESS ⚫ INFORMATION TECHNOLOGY

Visit us at www.itcportal.com ⚫ Corporate Identity Number : L16005WB1910PLC001985 ⚫ e-mail : enduringvalue@itc.in

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cc: Securities Exchange Commission Division of Corporate Finance Office of International Corporate Finance Mail Stop 3-9 450 Fifth Street Washington DC 20549 U.S.A. cc: Societe de la Bourse de Luxembourg 35A Boulevard Joseph II L-1840 Luxembourg

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Sl. No.	Particulars	Disclosures
1.	Name of the target entity	No separate entity is being acquired. The Company has entered into a BTA with ABREL for acquisition of the Undertaking pertaining to manufacture, distribution and sale of pulp and paper products operated under the name of ‘Century Pulp and Paper’ (‘CPP’), as a going concern on a slump sale basis, as per the terms and conditions laid down in the BTA.
2.	Whether the acquisition would fall within related party transaction(s)? Whether the promoter / promoter group / group companies have any interest in the entity being acquired? If yes, nature of interest and details thereof and whether the same is done at ‘arm’s length’	No.
3.	Industry to which the entity being acquired belongs	Paper and Paperboards.
4.	Objects and impact of acquisition (including but not limited to disclosure of reasons for acquisition of target entity, if its business is outside the main line of business of the listed entity)	Established in 1984 at Lalkuan (Nainital, Uttarakhand), CPP is a well-established player in the Indian Paper industry with an installed capacity of 4.8 lakh MT per annum. The acquisition is in line with the Company’s strategy to drive the next phase of growth in its Paperboards and Specialty Papers Business by expanding capacity at a new location, given the limited scope for expansion at the existing facilities.
5.	Brief details of any governmental or regulatory approvals required for the acquisition	The completion of the aforesaid acquisition is subject to approval from (i) the Competition Commission of India; (ii) Ministry of Environment, Forest and Climate Change, Government of India; and (iii) any other authority as may be necessary.
6.	Indicative time period for completion of the acquisition	The transaction is expected to be consummated in about 6 months, subject to receipt of statutory approvals and fulfilment of the conditions laid down in the BTA.
7.	Consideration - whether cash consideration or share swap or any other form and details of the same	Cash.

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Sl. No.	Particulars		Disclosures	Disclosures	Disclosures
8.	Cost of acquisition and / or the price at which the shares are acquired		Lumpsum consideration of up to`3,500 crores on a cash-free debt-free basis, payable on Closing, subject to adjustments in accordance with the terms and conditions set out in the BTA.
9.	Percentage of shareholding / control acquired and / or number of shares acquired		Not Applicable.
10.	Brief background about the entity acquired in terms of products / line of business acquired, date of incorporation, history of last 3 years turnover, country in which the acquired entity has presence and any other significant information (in brief)		The transaction involves acquisition of the Undertaking pertaining to manufacture, distribution and sale of pulp and paper products from ABREL. Products_/_line of business of the target entity As stated above Date of incorporation Undertaking was established in 1984 Last 3 years’ turnover (Pulp and Paper Segment of ABREL) 2023-24 3,375 crores<br>2022-23<br>3,572 crores 2021-22 `2,818 crores Country of operations India
			Products_/_line of business of the target entity	As stated above
			Date of incorporation	Undertaking was established in 1984
			Last 3 years’ turnover (Pulp and Paper Segment of ABREL)	2023-24	`3,375 crores
				2022-23	`3,572 crores
				2021-22	`2,818 crores
			Country of operations	India

ITC Limited Virginia House 37 J. L. Nehru Road Kolkata, 700 071, India Tel.: 91 33 2288 9371 Fax: 91 33 2288 0655

Press Release March 31, 2025

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ITC announces strategic acquisition of Pulp & Paper Undertaking of Aditya Birla Real Estate Limited

ITC Limited has signed a Business Transfer Agreement today to acquire the Pulp and Paper Undertaking (‘CPP’) of Aditya Birla Real Estate Limited (‘ABREL’). Established in 1984 at Lalkuan (Nainital, Uttarakhand), CPP is a well-established player in the Indian Paper industry with an installed capacity of 4.8 Lakh MT per annum.

India is the fifth-largest producer of paper and paperboards in the world, with an estimated production of around 23 million MT per annum and an annual industry turnover of over Rs. 80,000 cr. India’s per capita consumption at appx. 16 Kg. per annum is low as compared to the global average of 57 Kg., reflecting immense headroom for growth. India is one of the fastest growing markets in the world with demand for paper and paperboards growing at 6%-7% p.a., translating to incremental demand of over 1 million MT annually. End-user industries such as FMCG, Food Service / Quick Service Restaurants, Pharmaceuticals, e-Commerce, Education & Stationery and increasing demand for sustainable packaging solutions are expected to be the key drivers of growth going forward.

ITC’s Paperboards & Specialty Papers Business is a reputable player in the industry offering a wide range of products manufactured at its four world-class facilities with an annual throughput of over 1 million MT. The Business is an exemplar in sustainability with over 50% of its energy requirements met from renewable sources. The integrated nature of the business model is a key source of competitive advantage for the Business besides creating a significant economic multiplier. The key elements of the business model comprise access to sustainable and cost-competitive fibre chain, in-house pulp manufacturing capability, world-class product quality, state-of-the-art manufacturing facilities, strong sales and distribution network, increasing digitalisation across all nodes of operations along with robust forward linkages with the Company’s Education & Stationery Products and Packaging & Printing Business.

CPP is a one-of-a-kind asset with a strong strategic fit with ITC’s Paperboards & Specialty Papers Business. The acquisition will immediately add significant scale and economies to existing operations with potential for further capacity expansion, provide locational advantage for efficient customer servicing and proximity to key raw material sources, mitigate operational risks through multi-site operations and enhance resilience across industry cycles through portfolio diversification. The Business expects to drive structural improvement in profitability of CPP through several value unlock interventions such as capacity debottlenecking, product quality upgrade, efficiency improvement leveraging TPM/Digital initiatives, supply chain optimisation, overhead rationalisation, and procurement efficiencies.

Commenting on the acquisition, Mr. B Sumant, Executive Director, ITC Limited said, “The acquisition will strengthen the market standing of ITC’s Paperboards and Specialty Papers Business and engender new opportunities in the domestic and international markets. The acquisition aligns with the Company’s strategy of driving the next horizon of growth in the Paperboards and Specialty Papers Business by expanding capacity at a new location considering that the existing facilities are already saturated. The strong linkages to afforestation and livelihood creation pursued by both the entities contribute meaningfully to national priorities. We are delighted to welcome CPP into the ITC fold and I am confident that together we will continue to set new benchmarks in customer satisfaction, operational excellence and sustainability.”

A presentation on the acquisition is enclosed.

Nazeeb Arif, Executive Vice President, Corporate Communications

FMCG ⚫ PAPERBOARDS & PACKAGING ⚫ AGRI-BUSINESS ⚫ INFORMATION TECHNOLOGY

Visit us at www.itcportal.com ⚫ Corporate Identity Number : L16005WB1910PLC001985 ⚫ e-mail : enduringvalue@itc.in

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Announcing Strategic Acquisition of Century Pulp & Paper Undertaking (CPP)

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Forward-Looking Statements

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This presentation contains certain forward-looking statements including those describing the Company’s strategies, strategic direction, objectives, future prospects, estimates etc. Investors are cautioned that “forward looking statements” are based on certain assumptions of future events over which the Company exercises no control. Therefore there can be no as to their and readers are advised not to undue reliance on these guarantee accuracy place any forward looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. These statements involve a number of risks, uncertainties and other factors that could cause actual results or positions to differ materially from those that may be projected or implied by these forward looking statements. Such risks and uncertainties include, but are not limited to: growth, competition, acquisitions, domestic and international economic conditions affecting demand, supply and price conditions in the various businesses in the Company’s portfolio, changes in Government regulations, tax regimes and other statutes, and the ability to attract and retain high quality human resource.

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Contributing to all sectors of the economy Agriculture, Manufacturing & Services

ITC Group

Leading FMCG Marketer

Well-established player in Paperboards, Paper & Packaging

Branded Packaged Foods

Education & Stationery

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Safety Matches & Incense Sticks

Personal Care

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Foremost Agri Player Pioneering Rural Transformation

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ITC Infotech: Specialised Global Tech Services & Solutions provider

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ITC Hotels: India’s Pre-eminent Hospitality chain Trailblazer in Responsible Luxury

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ITC

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69,446 cr. FY24 Gross Revenue

25+ World-class Mother Brands in FMCG

60 lakh Sustainable livelihoods supported

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Responsible Competitiveness | Enduring Value

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12 Future-ready Businesses

24,479 cr. FY24 EBITDA Margins @ 38%

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Amongst Top 3 Contribution to the Exchequer

Consistently in the Top League Profits | Market Cap

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Global exemplar In Sustainability

World-class Talent

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Indian Paper & Paperboard Industry Overview

India one of the fastest growing markets in the world

Immense headroom for Growth

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Domestic Industry size estimated at 23 mln. MT p.a.

Per capita consumption (in Kgs)

• Growing at 6-7% p.a.

• Annual Incremental demand > 1mln. MT

Industry Revenue > Rs. 80,000 cr. annually

Employment

Direct employment to over 5 Lakh persons

Indirect employment to 15 lakh

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197
84
57
16
India Global China US
Average
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Growth Drivers : FMCG, Food Service/QSR Packaging, Pharma, E-commerce, Sustainable packaging, Education & Stationery, Exports etc.

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ITC Paperboards, Paper & Packaging Segment

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8,344 cr. FY24 Revenue

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Well-established player in Paperboards & Specialty Papers Scale | Range | Customisation

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Best-in-class operating metrics Superior Process knowhow

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21% EBITDA Margin FY19-FY24 Avg.

One stop shop packaging solutions provider

Sustainability Exemplar 50% Energy from Renewable Sources | AWS* Certification | GreenCo Platinum+

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*Alliance for Water Stewardship

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ITC Paperboards & Specialty Papers Business

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• Annual throughput ~1 mln MT

• Structural advantages → backward integration, sustained investments in TPM, Industry 4.0

• 4 world-class manufacturing facilities

• Bhadrachalam - largest site with ~8 Lakh TPA capacity

• ⁻ Sustained investments over 4 decades for growth

• ⁻ 3x scale-up in last 2 decades – fresh investments, debottlenecking, efficiencies

• ⁻ Limited headroom for expansion - Business has been exploring alternative sites

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ITC Paperboards & Specialty Papers Business

Integrated Business Model

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In-house Pulp HPRB
Import substitution Future-ready | Sustainable
Sustainable Competitive
Advantage
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Fibre chain
Secure | Cost-competitive | Sustainable |
Resilience | Wood & Pulp Yield
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Manufacturing Excellence
Digital | TPM | Lean
Industry 4.0
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Robust forward linkages
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* High Pressure Recovery Boiler

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ITC Paperboards & Specialty Papers Business

Cost Agility

Growth

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• In-house chemical pulp & BCTMP

• • Industry 4.0 & Digital

• Continue to premiumise the portfolio

• Scale up Sustainable Paperboard & Packaging solutions

• HPRB, RE investments

• Cost-competitive fibre chain

• • Powerful TPM* | Lean programs

• Expand capacity at a new site to drive next phase of growth

Strategy Pillars

Customization

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• Solutions for end-use industries - collaborations

• Best-in-class service levels

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Sustainability at the Core

* Total Productive Management

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ITC Paperboards, Paper & Packaging Segment

Revenue (Rs cr.)

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1 0 00
8 0 0
6 0 0
4 0 0
2 0 0
5860 6107 5619 7642 9081 8344
0
FY19 FY20 FY21 FY22 FY23 FY24
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Performance Trends

PBIT Margin

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50%
40%
30% 25%
21% 21% 22%
Avg 21%
20%
20%
10% 16%
0%
- 10% FY19 FY20 FY21 FY22 FY23 FY24
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FY20-24 Cumulative Free Cash Flow generation over Rs 4,000 cr.

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Current Industry Context

Recent performance impacted by:

• Sharp increase in low-priced imports into India and other international markets

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Strategic interventions

Collaboration with Wood Based Industries (WBIs)

Sharpening Portfolio

▪ Unprecedented surge in domestic wood prices

• ₋

• ₋

• Other Wood Based Industries (WBIs) procuring from core sourcing catchments

• Lower Plantations during Covid years

Plantation strategy reset + Continued thrust: Collaborative PPP model on Strategic Cost Management + degraded forest land Digital → improved efficiencies

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Wood prices expected to moderate in next few quarters

Business structurally well placed

- Plantation activity picking up pace

Investigations initiated by Govt. on cheap imports

- Industry expects trade remedies to be introduced in coming months

Integrated business model Core area Plantations Strong end-user engagements In-house pulp, energy efficiency, Digital Initiatives process excellence

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About Century Pulp & Paper Undertaking

Business started in 1984 at Lalkuan , Uttarakhand

Strong presence in North – large market

Wood & Bagasse based in-house pulp manufacturing capability Robust fibre sourcing linkages

One-of-a-kind Asset Scale | Capability

Well-established player in the Industry Installed Capacity: 4.8 lakh MT p.a.

Strong performance track-record Revenue: Rs. 2958 cr. * EBITDA: Rs. 506 cr. *

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*Last 5 Yr. average (excl. FY21 – Covid impacted)

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Strong Strategic Fit with ITC Paperboard & Specialty Papers Business

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Adds Significant Scale
& Economies
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Locational Advantage

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De-risks Operations
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Significant Value Unlock opportunity

• Immediate addition to scale & economies while not adding to industry capacity

• Scope for further expansion

• Faster time-to-market vs. Greenfield option (~5-6 yrs)

• • Greenfield site with suitable RM linkages & approvals difficult to find

• Facility in North India complements existing facilities in South

• • Efficient customer servicing across markets

• • Proximity to key raw material sources

• •

• Multi-site operations with Quality improvement matching capabilities • Mix enrichment

• • • Portfolio diversification Capacity debottlenecking enhances resilience across • Pulp import substitution

• industry cycles

• Mix enrichment

• • Capacity debottlenecking

• • Pulp import substitution

• Efficiency improvement thru’ TPM| Digital

• • Supply chain optimisation

• • Procurement efficiencies

• Operating leverage

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Key Aspects of the Acquisition

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Expected to be EPS accretive in the first full year of operations

Drive structural improvement in Profitability

• Targeting 30% to 40% increase in EBITDA/Ton (over normalised levels) post 2 full years of operations, through identified value unlock interventions.

• Capacity debottlenecking.

• Expect high-teens ROCE on investments in the medium term

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Strategic Optionality Value

• Additional capacity, Pulp import substitution

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Acquisition within Capital Allocation framework of the Company

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• Aligned with growth strategy to expand capacity at a new site to drive next phase of growth

• ⁻ Capex at existing facilities to be suitably calibrated

• Paperboards, Paper & Packaging Segment expected to continue generating robust Free Cash Flow going forward

• ⁻ Free Cash Flow generation over Rs 4,000 cr. during FY20 to FY24

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Transaction Structure

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Business Transfer Agreement

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Management

• of ABREL* as a on a

• Acquisition of Pulp and Paper Undertaking going concern slump sale basis

• Lumpsum consideration of upto Rs 3,500 cr. on a cash-free, debt-free basis payable on Closing, subject to adjustments as per the Business Transfer Agreement

• Transaction expected to be consummated in appx. 6 months subject to fulfilment of necessary Closing conditions and receipt of statutory approvals (incl. transfer of land lease, Competition Commission of India)

• The Undertaking will be part of ITC’s Paperboards, Paper & Packaging Segment

*Aditya Birla Real Estate Ltd.

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Thank You

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