UltraTech Cement To Acquire Majority Stake In India Cements; Stocks In Green

The stocks of Ultra Tech Cement and India Cements traded in green with nearly 1 per cent gain after the former’s board of directors approved the purchase of 32.72 per cent equity stake of the promoters and their associates in India Cements.

Ultra Tech made a financial investment in India Cements to acquire 22.77 per cent equity at a price of Rs 268 per share in June 2024.

The latest transaction will increase UltraTech's ownership in India Cements to 55.49 per cent making it a majority shareholder.

UltraTech today said that the promoter group of India Cements "approached us as they wanted to sell their holding in the company, and we found it appropriate to acquire their stake in the company."

India Cements has a total capacity of 14.45 million tonnes per annum of grey cement. Of this, 12.95 mtpa is in the South (particularly Tamil Nadu) and 1.5 mtpa is in Rajasthan.

"The transaction is subject to regulatory approvals," UltraTech Cement said in the exchange filing after the board meeting held on Sunday.

Post signing of the share purchase agreement (SPA) and obtaining regulatory approvals, UltraTech will pay Rs 3,954 crores at Rs 390 per share for buying 32.72 per cent stake it acquired in India Cements from the promoters and their associates.

"This will trigger a mandatory open offer, at Rs 390 per share. The Open Offer will be done subsequently after obtaining all regulatory approvals," said UltraTech.

Both the acquisition and the open offer are expected to be consummated within six months, subject to regulatory approvals.