Acquisition of cement units of Jaiprakash Associates Limited

04 July 2016

The Board of Directors of UltraTech Cement Limited, an Aditya Birla Group company, at its meeting held today, in continuation of its agreement signed on 31 March 2016, approved a Scheme of Arrangement between the company, Jaiprakash Associates Limited, Jaypee Cement Corporation Limited and their respective shareholders and creditors (“Scheme”) for acquisition of cement plants for a total capacity of 21.2 MTPA at an enterprise value of Rs.16,189 crore.

The proposed transaction is essentially a “geographic market expansion” which will lead to UltraTech’s entry into growing markets of India, such as the Satna cluster [in Uttar Pradesh (East) and Madhya Pradesh (East)], Himachal Pradesh, Uttarakhand and coastal Andhra Pradesh. The operations will be strengthened by the consequent technological upgradation and enhancement in capacity utilisation on a year-on-year basis, creating synergies in manufacturing, distribution and logistics leading to economies of scale and creation of efficiencies by reducing lead time to markets, enhancing competitiveness and thereby benefiting consumers; and creating value for its shareholders by acquiring ready-to-use assets.

The transaction is subject to the approval of shareholders and creditors, high courts and all other regulatory approvals as may be required and will be consummated within the next 12 months.

Upon consummation, the company’s cement capacity will stand augmented to 91.1 MTPA including its overseas operations.