UltraTech Cement, India’s largest cement producer, is set to acquire a 23% stake in India Cements Limited (ICL) for a total deal value of Rs.1,885 crore. This move will make UltraTech the second-largest shareholder in India Cements, after the founding family who currently holds a 28.5% stake.
Key Details of Acquisition of India Cements by UltraTech Cement
- UltraTech Cement Acquire 23% stake of non-controlling equity share capital of ICL
- The total number of Shares acquired is 7.06 crore equity shares at the price per Share of Rs.267
- Total Deal Value is Rs.1,885 crore.
- The Investment is of Non-controlling financial investment, which means UltraTech is not taking over the management or operations of India Cements.
- The Expected Completion of the acquisition is within a month
- The Payment of Mode is Cash transaction
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Impact of Acquisition of India Cements by UltraTech Cement
This acquisition will strengthen UltraTech’s presence in the South Indian cement market, where India Cements is a major player.
It will also help UltraTech to compete with other major players like Adani Group, which has been aggressively expanding in the cement sector.
This deal is expected to benefit both companies, as it will give UltraTech access to India Cements’ established distribution network and market share, while India Cements will benefit from UltraTech’s financial and operational expertise.
Important Note:
While this acquisition is a significant development in the cement industry, it’s important to remember that this is a non-controlling stake. UltraTech is not taking over the management or operations of India Cements.
India is the second-largest cement producer in the world, contributing over 7% of the global capacity. The industry plays a crucial role in supporting various sectors like infrastructure, construction, housing, transportation, and power generation.
The growth of the cement industry is closely linked to the overall economic development of the country, as it is a key indicator of construction activity.
The per capita cement consumption in India is significantly lower than the global average. While India is the second-largest cement producer globally, its per capita consumption hovers around 235 kg, compared to the world average of approximately 520 kg. As the Indian economy continues to grow, increased construction activity and higher disposable incomes are likely to drive cement consumption.