Birla Corp acquire Reliance’s cement business in Rs 4,800-cr deal

Birla Corp to acquire Reliance’s cement business in an Rs 4,800-cr deal

10:17 AM, 8th February 2016
Birla Corp to acquire Reliance’s cement business in an Rs 4,800-cr deal

KOLKATA, INDIA: Birla Corporation Ltd (Birla Corp) said that it has agreed with Reliance Infrastructure Ltd to acquire all the shares of Reliance Cement Company Pvt Ltd (Reliance Cement) - its entire cement business, for an enterprise value of Rs 4,800 crores.

This acquisition will take Birla Corp’s total capacity from 10 mtpa to 15.5 mtpa, strengthening its presence in the high growth central region. The company’s expansion potential will also be enhanced – with mineral concessions in Madhya Pradesh, Maharashtra, Rajasthan, Karnataka, Andhra Pradesh and Himachal Pradesh – to emerge as a pan-Indian player in the foreseeable future, Birla Corp said.

Reliance Cement has three cement units, an integrated cement plant at Maihar (Madhya Pradesh) and grinding units at Kundanganj (Uttar Pradesh) and Butiburi (Maharashtra). Birla Corp will also benefit from Reliance Cement’s strategically located raw material sources, captive coal mine, optimum manpower, efficient operating parameters and technical capability for producing top-end quality product.

“Reliance Cement fits our plans to grow the business profitably and offers lucrative prospects for creating synergy with existing operations. It provides an excellent platform for increasing our footprint in existing as well as new geographies,” said Shri Harsh Lodha, chairman of Birla Corp.

Axis Capital acted as financial advisor, Nishith Desai Associates acted as counsel to Birla Corp for this transaction and Deloitte conducted the financial and commercial due diligence.

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