MUMBAI/CHENNAI: In a strategic transfer to bolster his place as India’s largest constructing supplies maker, billionaire Kumar Mangalam Birla has struck a cope with N Srinivasan and his household to amass their cement enterprise for Rs 3,954 crore.
UltraTech Cement, part of the $65-billion Aditya Birla conglomerate, will purchase about 33% stake in India Cements, valuing the Chennai-based firm at Rs 390 a share.This provides to the 23% stake UltraTech bought in June. Moreover, UltraTech will make an open provide to India Cements‘ public shareholders to amass an additional 26% stake on the identical value according to India’s takeover norms, elevating the entire price for UltraTech to Rs 7,100 crore.
If authorized by regulators, this deal will lengthen UltraTech’s footprint within the extremely fragmented and fast-growing southern market, significantly in Tamil Nadu, the place it has had restricted presence. The shortage of limestone in Tamil Nadu has restricted UltraTech from organising new built-in models within the state since buying its final unit in Aug 1998.
UltraTech will add India Cements’ 14.5 million tonnes capability unfold throughout Telangana, Andhra Pradesh, and Rajasthan to its present 153 million tonnes capability and tackle the corporate’s 1,855 workers. UltraTech’s solely built-in unit in Tamil Nadu has a capability of 1.4 million tonnes, whereas India Cements has a capability of 6 million tonnes within the state.
Conglomerate chair Kumar Mangalam Birla stated the India Cements alternative is an “thrilling” one because it permits UltraTech to serve the southern market extra successfully and likewise “accelerates our path to 200 plus million tonnes capability”. UltraTech is up in opposition to Ambuja Cements, part of Gautam Adani’s enterprise, which is gunning for the main place within the trade. Ambuja has a capability of 89 million tonnes.
This deal follows Birla’s acquisition of a 23% stake in India Cements from billionaire investor and DMart founder Radhakisan Damani for Rs 1,885 crore at Rs 267 a share. Following this “monetary funding,” UltraTech was approached by the promoters of India Cements, who have been enthusiastic about promoting their holding within the firm.
Srinivasan joined India Cements after his father and the corporate’s co-founder handed away in 1968. At present the vice chairman and MD, Srinivasan, 79, is going through well being points, and his spouse and daughter, Rupa Gurunath, are usually not enthusiastic about working India Cements. The trio will step down from the board as soon as the acquisition is full.
India Cements has confronted monetary points in latest quarters, with its places of work being searched by the Enforcement Directorate earlier this 12 months in relation to sure overseas trade transactions. The corporate has been restructuring its stability sheet to scale back losses, modernize its classic vegetation, and meet working capital wants.
UltraTech Cement, part of the $65-billion Aditya Birla conglomerate, will purchase about 33% stake in India Cements, valuing the Chennai-based firm at Rs 390 a share.This provides to the 23% stake UltraTech bought in June. Moreover, UltraTech will make an open provide to India Cements‘ public shareholders to amass an additional 26% stake on the identical value according to India’s takeover norms, elevating the entire price for UltraTech to Rs 7,100 crore.
If authorized by regulators, this deal will lengthen UltraTech’s footprint within the extremely fragmented and fast-growing southern market, significantly in Tamil Nadu, the place it has had restricted presence. The shortage of limestone in Tamil Nadu has restricted UltraTech from organising new built-in models within the state since buying its final unit in Aug 1998.
UltraTech will add India Cements’ 14.5 million tonnes capability unfold throughout Telangana, Andhra Pradesh, and Rajasthan to its present 153 million tonnes capability and tackle the corporate’s 1,855 workers. UltraTech’s solely built-in unit in Tamil Nadu has a capability of 1.4 million tonnes, whereas India Cements has a capability of 6 million tonnes within the state.
Conglomerate chair Kumar Mangalam Birla stated the India Cements alternative is an “thrilling” one because it permits UltraTech to serve the southern market extra successfully and likewise “accelerates our path to 200 plus million tonnes capability”. UltraTech is up in opposition to Ambuja Cements, part of Gautam Adani’s enterprise, which is gunning for the main place within the trade. Ambuja has a capability of 89 million tonnes.
This deal follows Birla’s acquisition of a 23% stake in India Cements from billionaire investor and DMart founder Radhakisan Damani for Rs 1,885 crore at Rs 267 a share. Following this “monetary funding,” UltraTech was approached by the promoters of India Cements, who have been enthusiastic about promoting their holding within the firm.
Srinivasan joined India Cements after his father and the corporate’s co-founder handed away in 1968. At present the vice chairman and MD, Srinivasan, 79, is going through well being points, and his spouse and daughter, Rupa Gurunath, are usually not enthusiastic about working India Cements. The trio will step down from the board as soon as the acquisition is full.
India Cements has confronted monetary points in latest quarters, with its places of work being searched by the Enforcement Directorate earlier this 12 months in relation to sure overseas trade transactions. The corporate has been restructuring its stability sheet to scale back losses, modernize its classic vegetation, and meet working capital wants.
