UltraTech acquires 32.72% stake in India Cements, deal leads to open bid

India’s largest cement maker UltraTech Cement on Sunday announced that it will acquire 32.72 per cent stake in India Cements from the promoters of the southern entity. The deal, valued at Rs 3,954 crore, will trigger an open offer that, if fully subscribed, will raise the total cost for UltraTech to Rs 7,100 crore.

In a statement on Sunday, cement company Aditya Birla Group said that after signing share purchase agreements and obtaining regulatory approvals, UltraTech will pay Rs 3,954 crore at Rs 390 per share for acquiring 32.72 per cent stake in India Cements from the promoters and their partners.

India’s largest cement company added that the share purchase will trigger a mandatory open offer at the same price of Rs 390 per share. “The open offer will be made subsequently after obtaining all regulatory approvals,” UltraTech said in its statement.

UltraTech had in June made a financial investment of Rs 1,889 crore for a 22.77 per cent equity stake at a price of Rs 268 per share. UltraTech acquired this stake from the open market from billionaire investor Radhakishan Damani and his associates.

“Following this financial investment (in June), the promoter group approached us as they wanted to sell their stake in the company and we felt it was appropriate to acquire their stake in the company,” UltraTech said on Sunday.

India Cements has a total capacity of 14.45 million tonnes per annum (MTPA) of grey cement. Of this, 12.95 MTPA is in the south (mainly Tamil Nadu) and 1.5 MTPA in Rajasthan. The transaction is subject to regulatory approvals.

Kumar Mangalam Birla, Chairman, Aditya Birla Group, said, “UltraTech Cement’s investments over the years, both organic and inorganic, are aimed at making India a global champion in construction solutions.”

“The India Cements opportunity is exciting as it enables UltraTech to serve the southern markets more effectively and also accelerates our path to over 200 MTPA capacity,” he added.