September 2013
« Jul    

Contact us

India’s Cement King Kumar Birla Inks $600 Million Deal To Buy Rival Unit

Billionaire Kumar Birlacemented his position as India’s cement king by inking a deal Wednesday to buy a unit from rival Jaypee Group for $600 million. The acquisition by Birla’s listed company UltraTech Cement, the country’s largest cement producer, will increase its annual capacity to 59 million tons and boost its presence in the western state of Gujarat where the Jaypee unit is located.
The deal, which has been in the works for over a year and has undergone a few twists and turns, includes a unit with an annual capacity of 4.8 million tons, a captive power plant and rich limestone reserves. The transaction involves no immediate cash payment as UltraTech will assume the cement firm’s debt of $575 million and issue shares for the balance $25 million.
The sale by Jaypee which is owned by the Gaur family whose patriarch Jaiprakash Gaur features among India’s richest, is at a valuation of $125 per ton which is a bit of a bargain for Birla when compared to recent deals in the cement sector. It is estimated to reduce the the Jaypee group’s debt of $3.6 billion by 15% according to its chairman Manoj Gaur. (Recently, Jaypee announced plans to sell part of its hydro power assets as well.)
Birla who also has an additional expansion of 10 million tons in the pipeline, is striving to extend his lead over multinationals like Holcim which have established a significant presence in the Indian market. He was long considered the frontrunner to acquire the unit when Jaypee put it up for sale last year as part of efforts to reduce its debt load. But negotiations between the billionaire and the Gaur family unraveled last year when the two disagreed on valuation. After Birla backed out, the Gaurs began talks with Irish firm CRH CRH +1.93% but that too went nowhere and in October 2012 CRH announced that it had terminated the negotiations.
Birla’s latest acquisition comes smack in the middle of what is turning out to be a ‘feel better’ week for India on the economic front. The free falling stock market and rupee have both been recovering after economist Raghuram Rajan took charge as the governor of the Reserve Bank of India last week. It isn’t as yet clear though whether the ‘Raghu Effect’ is a temporary sunburst before the clouds gather again.
Source: Forbes

7 comments to India’s Cement King Kumar Birla Inks $600 Million Deal To Buy Rival Unit

  • Lovely just what I was searching for.

  • I want to express my thanks to the writer for rescuing me from this type of instance. Just after searching through the online world and meeting techniques which are not helpful, I was thinking my life was gone. Existing minus the solutions to the issues you have solved by means of your entire short article is a serious case, and the ones that could have in a negative way damaged my entire career if I hadn’t come across your web site. Your understanding and kindness in playing with all the pieces was useful. I don’t know what I would have done if I hadn’t discovered such a subject like this. I can also now relish my future. Thanks so much for the professional and sensible help. I won’t think twice to endorse your web blog to any person who will need direction about this subject.

  • I simply had to thank you very much all over again. I do not know what I could possibly have done without those thoughts discussed by you relating to my area. It became a very depressing circumstance for me personally, but viewing the professional manner you dealt with it forced me to cry over gladness. Now i’m happier for the service and even sincerely hope you really know what a powerful job you’re undertaking training the rest by way of your website. I’m certain you have never come across all of us.

  • Thanks so much for providing individuals with an exceptionally special possiblity to check tips from this website. It’s always so terrific and also full of amusement for me personally and my office friends to search the blog at the very least three times in a week to read the fresh guidance you have got. Not to mention, I’m just usually motivated with all the terrific inspiring ideas served by you. Some 4 areas on this page are definitely the most impressive we have all ever had.

  • My husband and i ended up being excited that Albert managed to conclude his web research through your ideas he made out of the weblog. It’s not at all simplistic just to possibly be offering key points that other folks may have been trying to sell. So we take into account we need the website owner to be grateful to for that. Most of the illustrations you have made, the simple site navigation, the friendships you can help promote – it is all incredible, and it is letting our son in addition to us reason why this subject matter is satisfying, and that is particularly vital. Many thanks for the whole lot!

  • I intended to compose you the little bit of word just to thank you the moment again for your personal fantastic tricks you’ve shown above. It is extremely generous with people like you to offer extensively exactly what many individuals could have supplied for an e book to help make some cash for themselves, most notably seeing that you could possibly have tried it if you wanted. These good tips as well acted to be the good way to realize that other people have the same zeal the same as my very own to realize many more in respect of this problem. Certainly there are numerous more enjoyable periods ahead for many who browse through your site.

  • My husband and i have been very joyous when Ervin managed to deal with his preliminary research through your precious recommendations he grabbed out of your web site. It’s not at all simplistic to just be giving away things which some others might have been making money from. And we understand we now have the website owner to be grateful to for that. The most important explanations you have made, the simple website navigation, the relationships you can give support to create – it’s got mostly great, and it is facilitating our son in addition to us imagine that that content is fun, and that is particularly mandatory. Thanks for the whole lot!

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>