CRH, the Irish building materials group, is planning to acquire a majority 51 per cent stake in the cement operations of Jaiprakash Associates in Gujarat for an enterprise value of Rs 4,200 crore, as mentioned in few media reports. In a move to retire its debt, worth a staggering Rs 40,000 crore, the group reached an understanding for offloading its controlling stake in Gujarat cement manufacturing facility. Further, the Ireland-based building material major will also have the option of hiking its stake to 65 per cent in over next three years at a pre-fixed price via a call option.
Jaypee Group, the country’s third largest cement maker, has a total installed capacity of 33.5 Mt, of which 23.7 MT comes under the aegis of Jaiprakash Associates. . The operations in Gujarat and Andhra Pradesh were recently divested into a separate entity , Jaypee Cement Corporation, to facilitate a stake sale. However, diverting from its earlier plans, the group although would offload its controlling stake in Gujarat Facility, but would not part ways with its stake in Andhra Pradesh plant with 4.8 MT capacity.
Back in 2008, CRH, made its way to India with the acquisition of 50 per cent stake in Hyderabad-based cement producer My Home Industries, for a consideration of $456 million.