Sagar Cements (SCL) has received in-principle approval for the acquisition of 100% equity stake in BMM Cements, which owns a cement plant of 1 million tonne capacity per annum and a captive thermal power plant of 25 MW capacity in Gudipadu near Tadipatri Anantapur District in the state of Andhra Pradesh. This company which has an Enterprise Value of Rs 540 crore has limestone reserves of around 155 million tonnes (MT). The successful completion of the transaction is subject to further negotiation to arrive at the acquisition price and other terms and conditions.
The proposed acquisition by SCL is the result of a strategic decision taken to leverage on the company’s strengths and explore opportunities to expand scale and presence in South Indian markets and create value for its stakeholders.
With this acquisition, Sagar Cements group’ total cement capacity will go up to 3.75 million TPA from its existing capacity of 2.75 Million Tonnes, with 25 MW coal based thermal power plant. After the proposed acquisition, cement produced from BMM plant is proposed to be marketed under the brand ‘Sagar’. The company will leverage its marketing and distribution network to enhance its production capacities, reduce overheads and reach out to wider markets.