UltraTech to acquire units from Jaiprakash Cement

The Board of Directors of UltraTech Cement Limited approved a Scheme of Arrangement between the company, Jaiprakash Associates Limited, Jaybee Cement Corporation Limited and their respective shareholders and creditors for the acquisition of cement plants for a total capacity of 21.2 MTPA at an enterprise value of Rs.16 189 crore. This is in continuation of its agreement signed on 31 March 2016.

The proposed transaction is a ‘geographic market expansion’ that will lead to UltraTech’s entry into growing markets in India, such as the Satna cluster, Himacha; Pradesh, Uttarakhand and coastal Andhra Pradesh. Operations will be strengthened by the technological upgrading and enhancement in capacity utilisation on a year-on-year basis, creating synergies in manufacturing, distribution and logistics leading to economies of scale and the creation of efficiencies by reducing lead times to markets, enhancing competitiveness and thereby benefitting consumers, and creating value for its shareholders by acquiring ready-to-use assets.

The transaction is subject to approval by shareholders and creditors, high courts and all other regulatory approvals as may be required and will be consummated within the next 12 months.

Upon consummation, the company’s cement capacity will stand augmented to 91.1 MTPA including its overseas operations.

Adapted from press release by Rebecca Bowden

Read the article online at: https://www.worldcement.com/indian-subcontinent/05072016/ultratech-to-acquire-units-from-jaiprakash-cement-457/