UltraTech advances talks to acquire Orient Cement amid sector consolidation: Report

UltraTech, led by Kumar Mangalam Birla, is actively negotiating to acquire Orient Cement from CK Birla, aiming to strengthen its market position in southern and western India amid sector consolidation efforts.

UltraTech, led by Kumar Mangalam Birla, is in advanced negotiations to acquire Orient Cement Ltd (OCL) from his uncle CK Birla, restarting talks amid intense consolidation efforts in the sector, as reported by Economic Times.

The renewed interest from UltraTech aims to outbid Adani Cement and strengthen its foothold in southern and western markets, particularly Maharashtra and Telangana. UltraTech recently acquired a 23% stake in India Cements, signalling its aggressive expansion strategy.

Sources familiar with the discussions told ET that UltraTech has proposed a price range of Rs 350-375 per share for Orient Cement, offering a substantial premium over its current market price. This offer values Orient Cement at approximately Rs 7,300-7,800 crore ($840-$938 million), reflecting a competitive bid aligned with recent industry transactions.

Moneycontrol could not independently verify the report.

However, discussions remain ongoing and a final agreement hinges on reaching a consensus on valuation. If successful, the acquisition could significantly bolster UltraTech's capacity goal of reaching 200 million tons per annum (MTPA) by 2027, further solidifying its position as a leading player in the cement industry.

Orient Cement, headquartered in Bhuvneshwar, reported Q4FY24 revenue growth of 8.5% to Rs 3200 crore and net profit rising 42% to Rs 174 crore on a yearly basis. The company's strategic focus on expanding into northern markets and increasing premium cement sales underscores its growth trajectory and attractiveness in the market.

Both UltraTech and Orient Cement have not officially commented on the ongoing negotiations, with market observers anticipating further developments ahead of Orient Cement's upcoming quarterly earnings announcement on July 19.