Jaiprakash surges on deal to sell cement plants

Reuters are reporting that Jaiprakash Associates has gained as much as 13% to a month-high of 8.75 rupees, with UltraTech Cement up as much as 1%.

The UltraTech board approved the deal to buy identified JAL cement plants at an enterprise value of 159 billion rupees (US$2.40 billion) last week.

"The successful amendment to the Mines and Mineral (Development and Regulations) Amendment Bill, 2016 will facilitate timely integration of Jaiprakash's assets with that of UltraTech," Kotak Institutional Equities has announced.

Brokerage has estimated the deal to be earnings dilutive in the initial few years.

The deal, announced in February, will raise UltraTech's installed annual capacity by one-third to about 91 million t, and provide Jaiprakash with much-needed relief to pare its debts.

Edited from source by Joseph Green. Source: Reuters

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