UltraTech Cement, controlled by Kumar Mangalam Birla, has acquired a 23% stake in India Cements from veteran investor Radhakishan Damani for £188.5 mn. The move intensifies UltraTech’s rivalry with Gautam Adani’s Ambuja Cements and ACC as both seek to challenge its position as India's largest building materials maker.
The transaction positions Birla as the second-largest shareholder of the Chennai-based India Cements, behind the founders, N Srinivasan and family, who hold 28%.
UltraTech, the world’s third-most-valued cement company, described the deal as a “non-controlling financial investment”, acquiring shares at Rs 267 each.
The 23% stake, which does not include a board position in India Cements, is a little shy of the threshold requiring an acquirer to make an open offer to public shareholders under the country’s takeover code. Despite Srinivasan and family owning 28% in India Cements, 46% of that is pledged, according to the company’s filings with the stock exchanges.
This transaction marks the exit of Damani, who is also the founder of retail chain DMart, from India Cements, where he first invested in fiscal 2020. Over the years, he had increased his stake to 22.8% from a little over 1.3%.
Birla to invest $50 mn in Texas
Meanwhile, Birla is investing $50 million to build a new chemical plant in the heart of the US oil-refining region as his Aditya Birla Group expands its North American footprint. The project will involve a “state-of-the-art advanced materials site” on 35 acres in Beaumont, Texas, an area that’s home to some of the country’s biggest refineries and petrochemical complexes, according to a statement.
The plant will house research-and-development facilities and produce epoxies, according to the statement. Aditya Birla styles itself as the largest Indian investor in the US, with more than $15 billion in assets in the country.
