Shares in Ultratech Cement rallied almost 5 per cent after reports that the company was to buy Jaypee Cement's Plant for Rs 5400 crores.
The stock was last trading at Rs 3652 on the National Stock Exchange, up 4 per cent over Tuesday's close.
The other unit, located at Sidhi, has 3.1 mtpa clinker and 2.3 mtpa cement grinding capacity. Both units have a total of 180 MW power generation capacity. "The board has approved the memorandum of understanding setting out the broad terms and conditions of the proposed acquisition. The enterprise value of this acquisition has been agreed at Rs 5,400 crore," Ultratech Cement said in a release.
The acquisition would create significant synergies and the units would add 4.9 mtpa capacity immediately, it said, adding the surplus clinker would enable Ultratech to augment its cement capacity by a further 1.8-2.5 mtpa. Following the acquisition, Ultratech's cement capacity in India would increase from around 60 mtpa to around 65 mtpa and with projects underway, it would go up to around 71 mtpa by 2016, Ultratech said.
With inputs from PTI