Shree Cement to buy 93% in UAE firm for ₹1,945 cr

KOLKATA: Shree Cement Ltd on Thursday said it had agreed to acquire a 92.83% stake in Union Cement Co PSC, a UAE-based firm, for an enterprise value of $305.24 million (₹1,945 crore).

Shree Cement has the option to take full control of the company’s shares, chief financial officer, Subhash Jajoo said.

Union Cement, founded in 1972, has an annual production capacity of four million tonnes and operations in the Emirate of Ras Al-Khaimah. As its plant is located close to the Saqr port, the company exports to other countries in the Gulf region and East Africa, Shree Cement said in a regulatory filing. Half of the unit’s output is consumed locally and the other half exported.

This will be Shree Cement’s first venture outside India and its biggest acquisition ever. Locally, the company produces 29.3 million tonnes of cement a year. The transaction is expected to be concluded in nine months, subject to approval from UAE regulatory bodies. Jajoo said Union Cement, which produces 3.3 million tonnes of clinker—the key ingredient for cement—was available at a “competitive price” of $75 per tonne of cement output.

Shree Cement has a cash reserve of around ₹4,000 crore, according to Jajoo. But the company hasn’t decided if it will pay for the acquisition entirely from its own coffers, he added.