Birla's UltraTech to buy Srinivasan’s stake in India Cements

In a strategic move to bolster his position as India’s largest building materials maker, billionaire Kumar Mangalam Birla has struck a deal with N Srinivasan and his family to acquire their cement business for £395.4 mn.
UltraTech Cement, a part of the $65-billion Aditya Birla conglomerate, will acquire about 33% stake in India Cements, valuing the Chennai-based company at Rs 390 a share. This adds to the 23% stake UltraTech purchased in June. Additionally, UltraTech will make an open offer to India Cements’ public shareholders to acquire an extra 26% stake at the same price in line with India’s takeover norms, raising the total cost for UltraTech to £710 mn.
If approved by regulators, this deal will extend UltraTech’s footprint in the highly fragmented and fast-growing southern market, particularly in Tamil Nadu, where it has had limited presence. The scarcity of limestone in Tamil Nadu has restricted UltraTech from setting up new integrated units in the state since acquiring its last unit in Aug 1998. UltraTech will add India Cements’ 14.5 million tonnes capacity spread across Telangana, Andhra Pradesh, and Rajasthan to its existing 153 million tonnes capacity and take on the company’s 1,855 employees. UltraTech’s only integrated unit in Tamil Nadu has a capacity of 1.4 million tonnes, whereas India Cements has a capacity of 6 million tonnes in the state.
This deal follows Birla’s acquisition of a 23% stake in India Cements from billionaire investor and DMart founder Radhakisan Damani for £188.5.