The transaction will make the Aditya Birla Group firm the second-largest shareholder in India Cements, trailing only the founders, who own 28.5%. — Reuters
New Delhi: UltraTech Cement Ltd, owned by billionaire Kumar Mangalam Birla, will acquire a 23% stake in India Cements for about US$226mil, intensifying consolidation in a sector that’s crucial for the country’s infrastructure development.
UltraTech will pay as much as 267 rupees a share to purchase 70.6 million shares of the Chennai-based India Cements, the Birla group company said in an exchange filing.
“This non-controlling financial investment constitutes around a 23%” stake in the cement maker,” the filing added.
Shares of UltraTech jumped as much as 7% to a record in Mumbai yesterday while India Cements surged by almost 14%.
The transaction will make the Aditya Birla Group firm the second-largest shareholder in India Cements, trailing only the founders, who own 28.5%.
The stake gives UltraTech a solid foothold in a cement maker that’s a sizeable player in southern India and underscores the intensifying battle between Birla and Gautam Adani’s conglomerates for dominance in India’s cement sector.
Two weeks back, Adani Group’s Ambuja Cements Ltd announced acquisition of Penna Cement Industries Ltd in a US$1.2bil deal that will expand its presence as well in southern parts of India.
Cement is a key raw material in all infrastructure projects, making it a crucial resource for achieving Indian Prime Minister Narendra Modi’s goal to modernise the country and meeting the growing demand for homes in the world’s most-populous country.
In April, UltraTech said it will buy India Cements’ grinding unit for 3.15 billion rupees. — Bloomberg
