This move aims to expand UltraTech's footprint in the highly competitive and fast-growing Southern cement market, particularly in Tamil Nadu.
The board of the Aditya Birla firm approved the acquisition of 32.72 per cent stake from promoters and their associates at Rs 390 per share, according to a regulatory filing from UltraTech on Sunday.
Besides, Ultratech has also announced a Rs 3,142.35 crore open offer to acquire another 26 per cent share of India Cements Ltd (ICL) from its shareholders.
This announcement comes within few weeks after it was reported that Adani Group, the second largest cement maker, is actively looking to buy cement businesses of debt-laden Jaypee Group for about ₹5,000 crore.
In mid of last month, the Gautam Adani's promoted group announced the acquisition of Hyderabad-based Penna Cement for Rs 10,422 crore this month, which will add 14 MTPA, taking its capacity to 93 MTPA. The acquisition was aimed at expanding Ambuja Cements' market presence, especially in South India.
With an installed capacity of 154.86 million tonnes per annum (MTPA) of grey cement, UltraTech Cement leads the Indian cement industry. It has ambitious plans to become one of the largest cement companies globally, targeting 200 MTPA. Adani Group, another major player, has also been actively expanding in the cement sector through acquisitions and organic growth.
The acquisition of India Cements will significantly enhance UltraTech Cement's market share in Southern India. As a result, UltraTech's presence in Tamil Nadu, Andhra Pradesh, and Telangana will strengthen. This move aligns with UltraTech's goal of becoming one of the largest cement companies globally, targeting an installed capacity of 200 million tonnes per annum (MTPA) of grey cement.
However, it is to be noted that regulatory approvals are necessary for the UltraTech Cement-India Cements deal. The Competition Commission of India (CCI) will review the acquisition to ensure it doesn't violate antitrust laws. Additionally, the Securities and Exchange Board of India (SEBI) will scrutinize the open offer process, as UltraTech aims to acquire more than 25% of India Cements' shares.
The expected timeline for completing the UltraTech Cement-India Cements acquisition can vary based on regulatory approvals, due diligence, and other factors. Generally, such transactions take several months. UltraTech will work diligently to finalize the deal, but specific dates haven't been publicly disclosed yet.
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