Dalmia Bharat unit to buy Jaiprakash cement, power assets for $687 million – EQ Mag
BENGALURU : Indian conglomerate Dalmia Bharat’s unit will acquire the cement and power businesses of Jaiprakash Associates Ltd for 56.66 billion rupees ($686.70 million), including debt, as it looks to expand its footprint into the country’s central region.
The deal includes cement capacity of 9.4 million tonnes per annum (mtpa) situated in the states of Madhya Pradesh, Uttar Pradesh and Chhattisgarh, along with clinker capacity of 6.7 mtpa and thermal power plants of 280 MW, the companies said in a statement.
The acquisition comes amid intense competition in domestic cement industry as companies look to expand their footprint and increase capacity.
The country’s top cement maker, UltraTech Cement, in June charted out a plan to increase its capacity to 159.25 mtpa to stave off competition from the sector’s newest entrant, Adani Group.
Dalmia, which has 14 cement plants in 10 states, said the deal was a “significant” step towards reaching 110 mtpa to 130 mtpa capacity by fiscal year 2031, with its current capacity pegged at 37 mtpa.
Meanwhile, Jaiprakash Associates, the flagship company of debt-ridden Jaypee Group, said it had decided to divest the cement business completely to repay its loans and focus on other core areas.
Jaiprakash Associates said it had divested more than 20 mtpa cement capacity to UltraTech Cement in 2014 and 2017, while selling its controlling stake of more than 2 mtpa cement capacity to Dalmia Group in 2015.
Monday’s transaction is subject to due-diligence, receipt of
approvals, including from lenders and regulatory authorities.
Shares of Dalmia Bharat ended up 3.2% at 1,906.30 rupees after the deal was announced.
($1 = 82.5100 Indian rupees)
Source: Reuters
