UltraTech Cement to buy Kesoram's cement business in Rs 5,379-cr deal, announces swap ratio of 1:52

UltraTech Cement Ltd said on Thursday it will buy the cement business of Kesoram Industries Ltd in an all-stock deal valued at Rs 5,379 crore, boosting its capacity ambitions in a highly competitive sector.

As a part of the deal, UltraTech will issue one share for every 52 shares of Kesoram and give UltraTech ownership of two integrated cement units in Karnataka and Telangana.

The deal implies an offer price of Rs 173.15, a 24.1% premium to Kesoram's last close of Rs 139.45.

"The transaction will provide UltraTech the opportunity to extend its footprint in the highly fragmented, competitive and fast growing Western and Southern markets in the country," UltraTech said in a statement.

The proposed transaction will accelerate UltraTech's path to achieving its stated goal of 200 million tons per annum (mtpa) cement capacity in India, it added.

Separately, Kesoram Industries said it withdrew scheme of demerger of arm Cygnet Industries and approved scheme of arrangement with UltraTech Cement of the demerged company. 

The cement business of Kesoram consists of 2 integrated cement units at Sedam (Karnataka) and
Basantnagar (Telangana) with a total capacity of 10.75 mtpa. Out of this total capacity, 8.50 mtpa is clinker
backed and 2.25 mtpa is surplus grinding capacity. The cement business also has a 0.66 mtpa packing plant
in Solapur, Maharashtra.

On Thursday, UltraTech's scrip on BSE closed 3% higher at Rs 9,000.65.