UltraTech Boosts Southern Footprint With Acquisition Of India Cements, Buys 32.72 Per Cent Promoters’ Stake

Aditya Birla Group’s cement flagship, UltraTech Cement Limited, will acquire a 32.72 per cent equity stake in India Cements for Rs 3,954 crore from the company’s promoters and its associates, subject to regulatory approvals.

The board of directors of UltraTech approved the purchase during their meeting on Sunday (28 July).

In June, UltraTech had made a non-controlling financial investment in India Cements Limited (ICL) by acquiring 7.06 crore equity shares, representing a 22.77 per cent stake, at a price of Rs 268 per share.

“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,” said UltraTech Cement.

India Cements is a major player in the south Indian cement sector, with a consolidated installed capacity of 14.45 million tonne per annum (MTPA) of grey cement. This includes 12.95 MTPA in the south (particularly Tamil Nadu) and 1.5 MTPA in Rajasthan.

The country’s largest cement company is set to sign a share purchase agreement (SPA) with the N Srinivasan-led ICL promoters and their associates, before seeking regulatory approvals.

Upon signing the SPA and obtaining regulatory approvals, UltraTech will pay Rs 3,954 crore at Rs 390 per share for buying 32.72 per cent stake in India Cements.

Following the acquisition, UltraTech’s stake in India Cements will rise to 55.49 per cent, triggering an open offer. India Cements will become a subsidiary of UltraTech Cement Ltd. UltraTech will make an open offer to India Cements shareholders at Rs 390 per share after obtaining all regulatory approvals, said the company in a statement on Sunday.

Kumar Mangalam Birla, chairman, Aditya Birla Group said UltraTech Cement’s investments over the years, both organic and inorganic, have been designed to propel India to become a building solutions champion globally.

The India Cements opportunity is an exciting one as it enables UltraTech to serve the southern markets more effectively and also accelerates the company’s path to over 200 MTPA capacity, he added.

UltraTech currently has a consolidated capacity of 154.86 MTPA of grey cement. As the third-largest cement producer in the world, it now boasts 150 per cent of the cement capacity in the United States and 80 per cent of Europe’s capacity.

In April 2024, India Cements approved the sale of its grinding unit at Parli Vaijnath in Beed District, Maharashtra — with an installed capacity of 1.1 MTPA — to UltraTech for Rs 315 crore.

Last November, UltraTech acquired the 10.75 MTPA cement business of Kesoram Industries in a share-swap deal valued at Rs 7,600 crore.

This acquisition of India Cements occurs amidst an intense competition between UltraTech and Adani Group companies Ambuja Cement and ACC to dominate the cement market.