UltraTech Cement on February 25 announced 1:52 share swap ratio for acquisition of Kesoram Industries. The Aditya Birla Group's flagship company also said it will enter wires and cables segment with Rs 1,800-crore capex.
As per scheme of arrangement, one share of UltraTech Cement will be issued for every 52 shares held by equity shareholders of Kesoram Industries. The scheme will be effective March 1, 2025.
UltraTech Cement said it will set up wires and cables plant in Bharuch, Gujarat, with an expenditure of Rs 1,800 crore over next two years. The plant is expected to be commissioned by December 2026.
"The proposed entry into this segment of the construction value chain, through its Building Products Division, is in line with the Company’s strategy to strengthen its position as a comprehensive Building Solutions provider. UltraTech proposes to leverage its extensive manufacturing expertise coupled with its connect with the end-customers to deliver high-quality wires and cables thereby targeting a higher share of the customers wallet," said UltraTech in a press release.
Kumar Mangalam Birla, Chairman, Aditya Birla Group, said: "We intend to expand our presence in the construction value chain through our foray in the cables and wires segment, which aligns with our vision of providing comprehensive solutions to our end customers in the construction sector. Obviously, we will continue to focus and grow our core Cement business. This year UltraTech reached a new milestone of crossing 175 mtpa of cement capacity in India and is likely to emerge as the largest cement company globally (by sales volume ex-China). UltraTech remains committed to delivering superior quality building materials and solutions that contribute to the sustainable development of a Viksit Bharat."
UltraTech said it aims to meet the growing demand for wires and cables across various sectors, including residential, commercial, infrastructure and industrial applications. The wires and cables industry has witnessed revenue CAGR of around 13% between FY19 to FY24 and with the migration from the unorganized to the organised market, the outlook continues to remain robust which provides an attractive opportunity for a new trusted player in the sector, said UltraTech.
Kesoram acquisition
"In terms of the Scheme, the Company will issue: 1 fully paid-up equity share of Rs 10 each of the Company for every 52 fully paid-up equity shares of Rs 10 each held by equity shareholders of Kesoram Industries Limited," said UltraTech in a stock exchange filing. Kesoram has fixed the record date as March 10.
The deal will give a boost to the presence of the Aditya Birla group company as the assets are mostly in the southern markets.
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