UltraTech, Jaypee looking to complete cement deal by July
MUMBAI: The Aditya Birla group’s UltraTech Cement Ltd’s ₹16,189 crore acquisition of the cement business of Jaiprakash Associates Ltd is expected to be completed soon, a top group executive said in an interview.
“The Jaiprakash Associates acquisition is on track and should get done sooner than later,” group CFO Sushil Agarwal said, without giving details.
On completion, the purchase will increase UltraTech’s cement capacity by almost a third to 90.7 million tonnes per annum and give the company access to the markets of Madhya Pradesh, Uttar Pradesh (east), Himachal Pradesh and coastal Andhra Pradesh.
UltraTech had in July last year said it would acquire Jaiprakash Associates’ cement plants, with a total capacity of 21.2 million tonnes per annum, in one of the largest deals in the cement sector in India.
Both firms are looking to complete the deal by July, which is within the estimated time frame, said two people directly aware of the merger process, speaking on condition of anonymity.
In a regulatory filing in July 2016, UltraTech said that the acquisition was expected to be completed in the “next 9-10 months after getting all regulatory and shareholders’ approv- als”. In March, Jaiprakash Associates received the National Company Law Tribunal’s approval for transfer of its cement plants to UltraTech Cement. The deal got the Competition Commission of India’s approval in August and shareholders’ nod in October.
UltraTech reported an 11.3% drop in March-quarter profit at ₹726 crore against ₹819 crore a year earlier. Revenue rose 3% to ₹7,020 crore from ₹6,819 crore.
“Deals of such nature require approvals from multiple regulatory approvals. We understand that while UltraTech Cement has received several necessary approvals, it is still in the process of getting ownership of mining leases transferred to its name,” said Mangesh Bhadang, cement and infrastructure analyst at Nirmal Bang Securities Pvt. Ltd.