In recent events, India’s largest cement builder, Ultratech, has set a deal with India Cement to buy the shares of its promoters and their associates for INR 3,954 crore. In the deal, Ultratech will buy out a 32.72% stake in India Cements which will add to their initial holding of 22.77%. Further, the company also mentioned that it would offer public shareholders of India’s cement to acquire 26% of the company’s shares at the existing share price. This will increase the total cost of acquisition to Rs 7,100 crore.
Additionally, the deal between these two giants resonated far beyond the cement industry. There was ambiguity regarding who would take ownership of CSK (Chennai Super King), one of the most successful franchises in the IPL (Indian Premier League). However, by the end of the day on July 28, it became clear that Srinivasan and his family would own the franchise.
Kasi Viswanathan, the CEO of CSKCL, told Cricbuzz on Sunday, “Chennai Super Kings and India Cements are different entities. India Cements no longer controls the CSK team. The team is run by a company called Chennai Super Kings Cricket Limited (CSKCL).“
This merger, after getting approval from SEBI and other regulators, will give Ultratech Cement an upper hand in the fast-growing and fragmented southern market, especially in Tamil Nadu. Currently, Ultratech cement has only a 1.4 million tonne capacity in Tamil Nadu, and after acquiring India Cement, the capacity will increase by 6 million tonnes. According to Kumar Mangalam Birla, Chairman of Conglomerate, this will “accelerate our path to 200 plus million tonnes capacity.” This will enable the company to strengthen its position against Adani Enterprises, Ambuja Cement which currently holds a capacity of 89 million tonnes. On the other hand, the current capacity of Ultratech Cement became 159 million tonnes after it acquired Kesoram Industries for 7,600 crores in 2023.
