UltraTech Cement board approves 32.72% acquisition of India Cements

The Board of Directors of UltraTech Cement has in a meeting today (July 28), approved the purchase of 32.72 per cent equity stake of the promoters and their associates in India Cements, the company informed the exchanges.

As per the release, UltraTech will pay ₹3,954 crore at ₹390/share to buy 32.72 per cent stake in India Cements from the promoters and their associates.

The stake sale will also trigger a mandatory open offer, at ₹390/share, it added. Both the stake sale and open offer will be subject to regulatory approvals, it said.

The price offered by UltraTech is 4.1 per cent higher than the ICL shares' closing price of ₹374.60 last Friday.

Stake in India Cements

India Cements has a total capacity of 14.45 mtpa 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.

It stated that the company had made a financial investment in India Cements to acquire 22.77 per cent equity at a price of ₹268 per share in June 2024.

“Post this financial investment, the promoter group approached us as they wanted to sell their holding in the company. and we found it appropriate to acquire their stake in the company,” it added.

‘Organic & Inorganic Growth’

Kumar Mangalam Birla, Chairman, of parent company Aditya Birla Group in the release noted that UltraTech's investments (organice and inorganic) over the years, “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. This, in turn, has had tremendous impact on the lives and aspirations of people,” Birla added.

He said that the India Cements opportunity is “exciting” and enables UltraTech to “serve the southern markets more effectively and also accelerates our path to 200+ MTPA capacity”.