SINGAPORE Nov 16 UltraTech Cement (ULTC.BO), a
unit of Indian conglomerate Aditya Birla Group, is absorbing
sister unit Samruddhi Cement, to form the country's biggest
cement firm, both companies said.
The move, flagged in October, was approved by the boards of
both companies on Sunday. The combined entity will be better
placed to take on Swiss firm Holcim HOLN.VX, which controls
about a fifth of India's 200-million tonne cement market
through ACC (ACC.BO) and Ambuja Cements (ABUJ.BO).
"The merger will achieve the group's objective of
consolidating its cement business into a single entity, thereby
creating a platform that will help in pursuing aggressive
growth going forward," Kumar Mangalam Birla, chairman of Aditya
Birla Group, said in a statement on Sunday.
In October, the group said it will hive off the cement
business of flagship firm Grasim Industries (GRAS.BO) into unit
Samruddhi in a cashless transaction and later merge it with
group firm UltraTech. [ID:nBOM163083]
India's cement market has seen demand revive in the last
few months on resilience in rural consumption and higher
spending on roads and infrastructure projects.
Aditya Birla Group's enlarged cement unit said it will have
a production capacity of 48.8 million tonnes and become the
world's 10th largest cement firm.
Samruddhi shareholders will receive four shares of
UltraTech for every seven held in Samruddhi. UltraTech will
also issue 149.5 million new shares, boosting its capital to
2.74 billion Indian rupees ($59 million).
For the company statement, click:
($1=46.18 Indian Rupee)
(Reporting by Anshuman Daga; Editing by Lincoln Feast)