Birla Corp to acquire cement business of RInfra for Rs 4,800 crore

Birla Corporation (Birla Corp) has entered into an agreement with Reliance Infrastructure (RInfra) for acquisition of its entire cement business for an Enterprise Value of Rs 4,800 crore. The two companies have agreed that Birla Corp shall acquire all of the shares of Reliance Cement Company (Reliance Cement). The acquisition, subject to approval of Competition Commission of India (CCIL) and other relevant regulatory authorities, will be funded through existing cash reserves and incremental debt.

This acquisition will provide Birla Corp ownership of high quality assets taking its total capacity from 10 MTPA to 15.5 MTPA strengthening its presence in the high growth central region. The company’s expansion potential will also be enhanced -with mineral concessions in states of MP, Maharashtra, Rajasthan, Karnataka, Andhra Pradesh and Himachal Pradesh - to emerge as a pan-Indian player in the foreseeable future.

Reliance Cement has three cement units, an integrated cement plant at Maihar (Madhya Pradesh) and grinding units at Kundanganj (Uttar Pradesh) and Butiburi (Maharashtra). Birla Corp will also benefit from Reliance Cement’s strategically located raw material sources, captive coal mine, optimum manpower, efficient operating parameters and technical capability for producing top end quality product.

Birla Corp, established in 1919, is part of the MP Birla Group with presence across cement and jute; cement constitutes over 90% of the company’s revenues with units in Rajasthan, Madhya Pradesh, Uttar Pradesh and West Bengal.