UltraTech board approves deal to snare control of India Cement (updated)

India Cements

28/07/2024 11:19

(Adds analyst comments in paragraphs 7-8)
       NEW DELHI, July 28 (Reuters) - UltraTech Cement
 ULTC.NS , India's number one cement maker, said its board on
Sunday approved a $472 million deal to gain control of India
Cements  ICMN.NS , which will bolster its position in the
country's southern states.
    The deal comes as the country's top cement makers vie to
dominate a market that is expected to roughly double to $49
billion by 2029 from 2022 levels with an expected infrastructure
spending boom under the government of Prime Minister Narendra
Modi.
    UltraTech, part of India's Aditya Birla group, will buy a
32.72% stake in India Cements from its promoters and their
associates, adding to the 23% stake it bought in June.
    After the June stake sale, the promoters of India Cements
offered to sell their holding to the Birla group company,
UltraTech said in a statement.
    UltraTech will pay 39.54 billion rupees ($472.38 million) at
390 rupees per share for the 32.72% stake in India Cements, the
statement said. 
    The acquisition will trigger a so-called open offer
requirement that allows UltraTech to buy more shares from public
shareholders at the same price, which was a 4.3% premium to
India Cement's last close.
    Markets had anticipated that UltraTech would take control of
India Cements, a move that will help the Birla group meet its
production target of 183.5 million metric tons by the fiscal
year to March 2027, said Ashutosh Murarka, a research analyst at
Mumbai-based Choice Broking.
    "We expect the deal momentum in India's south to continue,"
he said.
    
($1 = 83.70 rupees)

 (Reporting by Neha Arora, Sethuraman NR and Hritam Mukherjee;
Writing by Mayank Bhardwaj; Editing by Sonali Paul and William
Mallard)
 ((mayank.bhardwaj@thomsonreuters.com; Twitter:
@MayankBhardwaj9;))