India's UltraTech buys stake in Star Cement for up to $100 million

Star Cement

27/12/2024 04:41

Dec 27 (Reuters) - India's UltraTech Cement  ULTC.NS 
will buy an 8.69% stake in Star Cement  STAT.NS , it said on
Friday, in a deal that could be valued at up to 8.51 billion
rupees ($100 million) and firm its leading position in the
sector.
    UltraTech said it would pay not more than 235 rupees per
Star Cement share, which is a 2% premium to the stock's closing
price on Thursday.
    There has been a wave of deals ever since billionaire Gautam
Adani's ports-to-power conglomerate entered the cement industry
in 2022 to challenge Aditya Birla Group-owned UltraTech's pole
position in the market.
    UltraTech's latest deal comes weeks after local media had
reported that the Adani Group was considering an acquisition of
Star Cement, the biggest producer in the country's north-east.
    Star Cement's shares jumped 7% in early trading to 247
rupees, above the maximum offer price, which usually implies
that investors are expect a higher offer or a rival bid.
    UltraTech's shares were up 0.7%.
    Star Cement, like many small cement mills, has suffered from
larger competitors vying for market share. Its annual sales
growth expected to slow to 6.8% this fiscal year, from 22% in
2023, according to an estimate by brokerage Nirmal Bang.
 
 ($1 = 85.3450 Indian rupees)

 (Reporting by Ashna Teresa Britto and Hritam Mukherjee in
Bengaluru; Editing by Savio D'Souza)
 ((AshnaTeresa.Britto@thomsonreuters.com))