Mega deal alert: UltraTech Cement to acquire 32.72 stake in India Cements for Rs 3,954 crore – Industry News

In a bid to further strengthen its position in the south Indian markets, UltraTech Cement, the flagship company of the Aditya Birla Group, has announced plans to acquire a 32.72% stake in India Cements from promoters and their associates for Rs 3,954 crore. This strategic move is expected to give it a competitive edge in the fast-growing Southern cement market, particularly in Tamil Nadu.

In addition, UltraTech has launched a Rs 3,142.35 crore open offer to acquire another 26% share of India Cements (ICL) from its shareholders. This announcement follows the Adani Group’s acquisition of Hyderabad-based Penna Cement for Rs 10,422 crore, which increased Adani’s capacity to 93 million tonnes per annum (MTPA).

UltraTech Cement, with an installed capacity of 154.86 MTPA, leads the Indian cement industry and aims to become one of the largest cement companies globally, targeting a capacity of 200 MTPA. Adani Group, which entered the cement business in September 2022 after acquiring Ambuja Cement, has set a target to achieve 140 MTPA capacity by FY28 through both organic expansion and acquisitions.

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The board of UltraTech approved the acquisition of a 32.72% stake from promoters at Rs 390 per share. Upon completion of the Rs 3,954 crore deal, UltraTech’s stake in ICL will increase to over 55%, mandating an open offer as per SEBI regulations. The open offer, priced at Rs 390 per share, is 4.1% higher than ICL’s last closing price. If fully subscribed, the open offer would cost Rs 3,142.35 crore to UltraTech.

UltraTech Chairman Kumar Mangalam Birla stated that the India Cements acquisition would enable UltraTech to serve Southern markets more effectively and accelerate its path to a 200 MTPA capacity. The acquisition is expected to be completed within six months, subject to regulatory approvals from the Competition Commission of India.

UltraTech currently operates one integrated unit in Tamil Nadu, with a capacity of 1.4 MTPA. The acquisition of India Cements will provide operational efficiencies and reduce time to market for UltraTech’s expansion plans in the Southern market.

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