PRAGUE, Oct 24 (Reuters) - Czech defence and industrial

firm Czechoslovak Group (CSG) said it will acquire IFF's

nitrocellulose business in Germany and the industrial park where

it is located, part of expansion in chemicals serving the

defence industry.

Under IFF, the business has manufactured nitrocellulose for

industrial purposes, serving customers primarily in coatings and

printing inks. IFF's products also include ingredients for food,

beverages and personal care items.

CSG said it would look to also include energetic

nitrocellulose production, used for defence purposes, consistent

with its other businesses, over time. That will involve

investment and consultation with regulatory authorities.

Financial details of the transaction were not disclosed.

"Even in the current situation, when the chemical industry

in Europe is facing high energy prices and demanding regulation,

the production of nitrocellulose for the ammunition industry and

other important industries... can ensure a long-term prospect

for companies operating in this field," Jan Marinov, head of

CSG's defence division, said.

"Energetic nitrocellulose production is strategically

important for the security of NATO and European Union countries

and their allies."

The deal is expected to close in the first half of 2025.

Privately-held CSG has seen its earnings sharply rise amid

ramped-up defence spending in the wake of Russia's invasion of

Ukraine in 2022, and has sought to expand.

It is closing in on a deal to buy U.S. group Vista Outdoors

ammunitions business Kinetic for $2.2 billion after refining its

offer this month.