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UltraTech Cement Acquires 32.72% Stake in India Cements
UltraTech Cement Expands Southern Market Presence with Strategic Acquisition
UltraTech Cement Limited has announced the acquisition of a significant 32.72% equity stake in India Cements Limited, reinforcing its position in the Southern market. The acquisition includes shares from the promoters and members of the promoter group of India Cements.
Key Acquisition Details
Acquisition Overview:
- UltraTech Cement Limited, through its Board of Directors, approved the acquisition.
- The acquisition involves multiple share purchase agreements dated 28th July 2024.
Specifics of the Acquisition:
Share Purchase Agreements:
- Acquisition of up to 6,81,20,424 equity shares (21.98% of equity share capital) from EWS Finance & Investments Private Limited and other promoters at Rs. 390 per share.
- Acquisition of up to 1,99,54,024 equity shares (6.44% of equity share capital) from Rupa Gurunath, Trustee of Security Services Trust and Financial Service Trust at Rs. 390 per share.
- Acquisition of up to 1,33,16,783 equity shares (4.30% of equity share capital) from Sri Saradha Logistics Private Limited at Rs. 390 per share.
Open Offer:
- An open offer for up to 8,05,73,273 equity shares (26% of equity share capital) at Rs. 390 per share from public shareholders.
Total Consideration:
- The total consideration for the acquisition is Rs. 3,954 crores.
Strategic Benefits
Impact on UltraTech Cement:
- Market Expansion: The acquisition extends UltraTech’s footprint in the highly fragmented and competitive Southern market, particularly Tamil Nadu.
- Operational Efficiency: Acquiring ready-to-use assets reduces time to market compared to greenfield projects.
- Capacity Augmentation: Enhances the value for shareholders and creates direct and indirect employment opportunities.
Industry Significance:
- Cement Industry: India Cements has a total capacity of 14.45 MTPA, with 12.95 MTPA in the South and 1.5 MTPA in Rajasthan.
- Economic Activity: The investment in the core sector like cement accelerates economic activity and drives progress.
Quotes from Leadership
Kumar Mangalam Birla, Chairman, Aditya Birla Group:
"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. 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."
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