MUMBAI: UltraTech Cement, part of the Aditya Birla Group and the country’s largest cement maker, has agreed to acquire 21.20 million tonnes per annum (MTPA) cement assets from debt-ridden Jaiprakash Associates and its unit by raising the enterprise value to Rs. 16,189 crore.
The deal will also catapult UltraTech’s total cement capacity to 91.1 million tonnes, making it one of the top five cement companies of the world, and bring to an end to speculations about the deal following a financial restructuring exercise at Jaiprakash Associates.
“The board of directors of UltraTech Cement at its meeting held Monday, in continuation of its agreement signed on March 31, 2016, approved a scheme of arrangement between the company, Jaiprakash Associates, Jaypee Cement Corp, and their respective shareholders and creditors for acquisition of cement plants for a total capacity of 21.2 MTPA, at an enterprise value of Rs. 16,189 crore,” an UltraTech statement said.
The transaction is a geographic market expansion, which will give UltraTech entry into the growing markets such as Satna in Uttar Pradesh (East) and Madhya Pradesh (East), Himachal Pradesh, Uttarakhand and coastal Andhra Pradesh.
Earlier in March this year, in one of the biggest deals in the domestic cement industry, embattled Jaypee Group had announced part sale of its cement business in five states and a grinding unit in Uttar Pradesh to Kumarmangalam Birlaled UltraTech for Rs. 15,900 crore.
Jaiprakash Associates has been selling its power and cement units to raise funds and reduce consolidated debt of Rs. 70,000 crore. There were reports that UltraTech wanted to reduce the ticket size of the transaction by selecting some of the assets.
Jaypee to sell its cement biz to UltraTech for Rs.16,189 cr
