UltraTech Cement Boosts Stake in India Cements to Majority Shareholder with $3.95 Billion Purchase

UltraTech Cement's Board approved the purchase of 32.72% equity stake in India Cements, boosting its ownership to 55.49%. The $3.95 billion transaction is subject to regulatory approvals and a mandatory open offer, expected to conclude within six months.

Ultra Tech Cement's Board of Directors has approved the acquisition of 32.72% equity stake from the promoters and their associates in India Cements, the Aditya Birla Group-owned company disclosed to stock exchanges on Sunday. Ultra Tech acquired an initial 22.77% equity at Rs 268 per share in June 2024.

This latest transaction will raise UltraTech's stake in India Cements to 55.49%, making it the majority shareholder. A statement from UltraTech confirmed, 'The promoter group of India Cements approached us with the intent to sell their holdings, and we found it appropriate to acquire their stake.'

India Cements boasts a production capacity of 14.45 million tonnes per annum (mtpa) of grey cement, with 12.95 mtpa located in Southern India, particularly Tamil Nadu, and 1.5 mtpa in Rajasthan. UltraTech noted that the transaction is pending regulatory approvals, including from the Competition Commission of India. Upon signing the share purchase agreement and receiving necessary approvals, UltraTech will pay Rs 3,954 crore at Rs 390 per share for the 32.72% stake.

This transaction will trigger a mandatory open offer at Rs 390 per share, which will proceed following regulatory approval. Both the acquisition and open offer are expected to conclude within six months.

Kumar Mangalam Birla, Chairman of the Aditya Birla Group, stated that UltraTech Cement's investments have aimed to position India as a global building solutions leader, driving economic activity and infrastructure development. The acquisition aids UltraTech in effectively serving Southern markets and accelerates its goal of 200+ MTPA capacity.

The limited limestone availability in Tamil Nadu has restricted new integrated unit setups. Hence, the proposed transaction with India Cements extends UltraTech's footprint in the competitive Southern market, particularly in Tamil Nadu.

UltraTech Cement Limited is the leading cement company of the Aditya Birla Group.