UltraTech Cement is reportedly in advanced talks to acquire the Indian operations of HeidelbergCement.
The country’s largest cement maker, which is facing stiff competition from Gautam Adani, is looking to acquire the 69.39 per cent stake of parent Heidelberg Materials in HeidelbergCement India Ltd, a Moneycontrol report said on Monday.
News of the potential acquisition led to the shares of HeiderbergCement India ending with gains of 5.51 per cent on the BSE to close at ₹226.90.
At the current price, HeiderbergCement has a market cap of ₹5,142 crore, with the parent’s stake valued at nearly ₹3,568 crore.
If UltraTech Cement is successful in acquiring this stake, it will trigger a mandatory open offer in line with the regulations of the Securities and Exchange Board of India (Sebi).
HeidelbergCement India has four integrated plants and the same number of grinding units and a terminal in the country. Its installed capacity is about 14 million tonnes (mt).
Heidelberg Materials entered India in 2006 and has consistently pursued its strategy of growth in the developing markets.
The group acquired majority stakes in Mysore Cements and Cochin Cements and formed a joint venture with Indorama Cement, which it fully acquired in 2008.
After the merger with Indorama Cement, Mysore Cements was renamed HeidelbergCement India Ltd. in 2009.
``We wish to inform you that HeidelbergCement India Limited has categorically replied to the news publication that it does not respond or comment to any market rumours,’’ HeidelbergCement said in a regulatory filing after the stock exchanges sought its clarification on the report.
Both UltraTech Cement and the Adani group have been following a mix of expansion and acquisition to expand their presence in India’s cement sector.
Last year the Kumar Mangalam Birla-company acquired more than 55 per cent in India Cements, and in December it announced the acquisition of an 8.69 percent stake in Star Cement for ₹851 crore.
UltraTech has an installed capacity of 156.66mt of grey cement. The company is planning to increase this capacity to 200mt by 2026-27.
Its rival Ambuja Cements which now belongs to the Adani group had acquired Saurashtra-based Sanghi Industries, Penna Industries and recently announced the acquisition of C.K. Birla-group firm Orient Cement.
