India's UltraTech Cement to buy Kesoram's cement business in $645 mln deal (updated)

Kesoram Industries

30/11/2023 13:25

(Recasts paragraph 1, adds context in paragraph 4 and 7,
background in paragraph 6)
       BENGALURU, Nov 30 (Reuters) - India's UltraTech Cement
 ULTC.NS  said on Thursday it will buy the cement business of
Kesoram Industries  KSRM.NS  in an all-stock deal valued at
53.79 billion rupees ($645.41 million), in a move to add heft to
its hold in the southern part of the country.  
    As a part of the deal, UltraTech will issue one share for
every 52 shares of Kesoram and give UltraTech ownership of two
integrated cement units in southern Indian states of Karnataka
and Telangana. 
    The deal implies an offer price of 173.15 rupees per share,
a 24.2% premium to Kesoram's last close.  
    Market leader UltraTech is looking to boost its capacity
ambitions in a highly competitive Indian cement sector, months
after smaller peer Ambuja Cements  ABUJ.NS , owned by
billionaire Gautam Adani, bought a majority stake in Sanghi
Industries  SNGI.NS . 
    The transaction, expected to be completed within 9-12
months, will provide the company "the opportunity to extend its
footprint in the highly fragmented, competitive and fast growing
Western and Southern markets in the country," UltraTech said.
    The proposed transaction will accelerate UltraTech's path to
achieving its stated goal of 200 million tons per annum (mtpa)
cement capacity in India, it added. According to the company's
website, it currently has a consolidated capacity of 137.85
MTPA, with 23 integrated manufacturing units.
    With this deal, Kesoram would be left with its smaller
business segment - rayon, transparent paper and chemicals. 
    
($1 = 83.3430 Indian rupees)

 (Reporting by Hritam Mukherjee in Bengaluru; Editing by
Nivedita Bhattacharjee and Krishna Chandra Eluri)
 ((Hritam.Mukherjee@thomsonreuters.com; X: @MukherjeeHritam;))