UltraTech gets CCI nod for acquiring majority stake in India Cements
23 Dec 2024
Aditya Bilrla Group flagship UltraTech Cement has received approval from the Competition Commission of India (CCI) for its proposed acquisition of a majority stake in India Cements Ltd, the company stated in stock exchange filing.
The CCI also granted UltraTech Cement permission to acquire an additional 26 per cent stake in South India-based cement company’s paid-up equity through an open offer.
The approval comes after UltraTech received a communication from CCI regarding the proposed acquisition of ICL asking the company ti detail the merits of the deal. UltraTech, however, said it has responded to the CCI communication and that it was "confident of the merits of our case".
UltraTech had, in June, acquired a 22.77 per cent stake in India Cements Ltd at Rs268 per share. Following this, the board of directors of the company approved a proposal to acquire an additional 32.72 per cent equity stake in the South India based cement maker in a deal worth Rs3,954 crore.
The acquisition of India Cements will help UltraTech expand its market in southern India without having to build a new plant or expand existing plant. However, expansion of its Reddipalayam Cement Works in Tamil Nadu is difficult as it has limited limestone reserves.
The acquisition of India Cements will help UltraTech save time and optimise resource use, including at its lone integrated unit at Reddipalayam.
The follow-up deal will make UltraTech the largest shareholder in India Cements with 55.49 per cent equity holding.
Besides, UltraTech announced a Rs3,142.35 crore open offer to acquire 26 per cent equity shares of ICL from its shareholders.