UltraTech Cement to acquire majority stake in India Cements

New Delhi [India], July 28 : Ultra Tech Cement's Board of Directors has approved the purchase of 32.72 per cent equity stake of the promoters and their associates in India Cements, the Aditya Birla Group-owned cement company informed stock exchanges on Sunday.
Ultra Tech had made a financial investment in India Cements to acquire 22.77 per cent equity at a price of Rs 268 per share in June 2024.
The latest transaction will increase UltraTech's ownership in India Cements to 55.49 per cent making it a majority shareholder.
UltraTech today said that the promoter group of India Cements "approached us as they wanted to sell their holding in the company, and we found it appropriate to acquire their stake in the company."
India Cements has a total capacity of 14.45 million tonne per annum of grey cement. Of this, 12.95 mtpa is in the South (particularly Tamil Nadu) and 1.5 mtpa is in Rajasthan.
"The transaction is subject to regulatory approvals," UltraTech Cement said in the exchange filing after the Board meeting held on Sunday.
"The Proposed Transaction is subject to the approval of the Competition Commission of India."
Post signing of the share purchase agreement (SPA) and obtaining regulatory approvals, UltraTech will pay Rs 3,954 crores at Rs 390 per share for buying 32.72 per cent stake it acquired in India Cements from the promoters and their associates.
"This will trigger a mandatory open offer, at Rs 390 per share. The Open Offer will be done subsequently after obtaining all regulatory approvals," said UltraTech.
Both the acquisition and the Open Offer are expected to be consummated within 6 months, subject to regulatory approvals.
Kumar Mangalam Birla, Chairman, Aditya Birla Group, said, UltraTech Cement's investments over the years, both organic and inorganic, have been designed to propel India to become a building solutions champion globally.
"Every investment in a core sector like cement accelerates economic activity and drives progress. These investments have also facilitated India's nationwide infrastructure upgrade, powering our country's growing need for housing, roads, and other vital infrastructure," the Chairman added.
"The India Cements opportunity is an exciting one as it enables UltraTech to serve the Southern markets more effectively and also accelerates our path to 200+ MTPA capacity," Birla further noted.
The limited availability of limestone in Tamil Nadu has resulted in restrictions on the setting up of new integrated units in Tamil Nadu. The company's last integrated unit in Tamil Nadu was acquired by the company's parent, Grasim Industries Limited in August 1998. So, UltraTech Cement said the proposed transaction with India Cements is therefore an endeavour to extend its footprint and presence in the highly fragmented, competitive and fast-growing Southern market in the country, particularly Tamil Nadu, where it has a limited presence.
UltraTech Cement Limited is the cement flagship company of the Aditya Birla Group.