UltraTech to acquire 32.72% additional stake in India Cements for ₹3,954 crore

It has entered into three share purchase agreements to acquire 32.72% of the equity share capital of ICL from the promoter family led by Srinivasan N and Gurunath, along with the holding entities. After the completion of the ₹3,954 crore deal, UltraTech's stake in India Cements Ltd (ICL) will reach over 55%, mandating it to go for an open offer as per the Sebi regulations.

The board of UltraTech has also approved an "open offer for up to 8.05 crore equity shares representing 26% of the equity share capital of the target, at a price of ₹390 per equity share from the public shareholders of Target", the filing said.

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

"Post signing of SPA and obtaining regulatory approvals, UltraTech will pay ₹3,954 crore at ₹390/share for buying 32.72% stake in India Cements from the promoters & their associates.

"This will trigger a mandatory open offer at ₹390/ share. The Open Offer will be done subsequently after obtaining all regulatory approvals," said a statement from the company.

Earlier, in June, UltraTech acquired 23% shares of ICL. It had acquired Damani-group’s stake in India Cements Ltd (ICL) through two block deals, estimated at around ₹1,900 crore.

"The proposed transaction is, therefore, an endeavour to extend the company’s footprint and presence in the highly fragmented, competitive and fast-growing Southern market in the country, particularly Tamil Nadu, where it has limited presence," said UltraTech.

This primary acquisition is subject to the receipt of applicable statutory and regulatory approvals from the Competition Commission of India and others.

Aditya Birla Group Chairman Kumar Mangalam Birla said the India Cements opportunity is an exciting one as it enables UltraTech to serve the Southern markets more effectively and also accelerates our path to over 200 MTPA capacity.

"UltraTech Cement’s investments over the years, both organic and inorganic, 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 the country's growing need for housing, roads, and other vital infrastructure. This, in turn, has had a tremendous impact on the lives and aspirations of people," he added.

ICL has a total group capacity of 16 MTPA, including 1.5 MTPA from its subsidiary Trinetra Cement Ltd.

While UltraTech has a consolidated capacity of 152.7 million tonnes per annum (MTPA) of grey cement. It has 24 integrated manufacturing units, 33 grinding units, one clinkerisation unit and 8 bulk packaging terminals.

Its capacity, over the past two decades, "has grown 11x, far outpacing the industry growth of 4x", according to an earlier statement by the company.

"It took 36 years for the cement business of Aditya Birla Group to get to a capacity of 100 MTPA. And UltraTech has subsequently added the next 50 mtpa in less than 5 years with an investment of around ₹32,000 crore," it added.

In the last AGM in 2023, Birla had set a target for 200 MTPA, aiming to become one of the largest cement companies in the world.

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