UltraTech Cement to acquire two cement business units of JAL

24 Dec 2014

UltraTech Cement, an Aditya Birla Group Company, has received an approval for acquisition of two cement business units of Jaiprakash Associates (JAL) in Madhya Pradesh. The board of directors at their meeting held on December 23, 2014 has approved for the same. The company will acquire an integrated cement plant with clinker capacity of 2.1 MTPA and cement grinding capacity of 2.6 MTPA at Bela, Madhya Pradesh along with CPP of 25 MW and integrated cement plant with clinker capacity of 3.1 MTPA and cement grinding capacity of 2.3 MTPA at Sidhi, MP along with CPP capacity of 155 MW.

This acquisition will create significant synergies and the surplus clinker will enable UltraTech to augment its cement capacity by a further 1.8-2.5 MTPA in addition to the 4.9 MTPA mentioned above. This acquisition will enable the company to increase its presence in Satna cluster of Madhya Pradesh. With this acquisition, the company’s cement capacity in India will increase from 60 mtpa to 65 mtpa and with projects underway the capacity will stand raised to 71 mtpa by 2016.

The board has approved the Memorandum of Understanding setting out the broad terms and conditions of the proposed acquisition. The Enterprise Value of this acquisition has been agreed at Rs 5,400 crore. The transaction is subject to customary due diligence, definitive agreements and regulatory approvals as may be required.

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