UltraTech to buy Century Textiles’ cement business
Aditya Birla Group firm UltraTech said it would acquire the cement business of BK Birla Group company Century Textiles and Industries through a share swap deal, a move which would further consolidate its position as market leader in the segment.
The UltraTech board, at its meeting held on Sunday, approved a scheme of arrangement amongst Century Textiles and Industries and its respective shareholders and creditors, the Aditya Birla Group firm said.
According to the scheme, the shareholders of Century would get one equity share of UltraTech, having a face Rs 10 each for every eight equity shares of Century of face value Rs 10 each.
"UltraTech will issue 1.4 crore new equity shares to the shareholders of Century, which will increase its equity capital to Rs 288.58 crore, divided into 28.86 crore equity shares of Rs 10 each," said UltraTech.
"The acquisition will contribute positively to the company's earnings," it added. The transaction would provide UltraTech, opportunity to further strengthen its presence in the east and central markets and extending its footprint in the Western and Southern markets in the country. "The operations will be bolstered by economies of scale arising out of synergies in procurement and logistics costs; creation of efficiencies by reducing time to market, enhancing competitiveness as well as customer service," said UltraTech, adding the transaction is expected to be "consummated within 6-9 months".
Other advantages stem from ready to use assets with a strong distribution network, availability of land, railway and other infrastructure. The acquisition is expected to lead to greater shareholder value creation, the company said. "The transaction is subject to the approval of shareholders and creditors, stock exchanges, NCLT, CCI and all other regulatory approvals as may be required," it said.
Century has three integrated cement units situated in Madhya Pradesh, Chhattisgarh and Maharashtra with a total capacity of 11.4 mtpa and a grinding unit in West Bengal.