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Birla Corp to acquire cement biz from Lafarge; scrip soars 11%

By Religare
|

Birla Corporation Ltd, a flagship company of the M P Birla group on Monday said that it will acquire both the Jojobera and Sonadih cement business from Lafarge India Pvt. Ltd for an enterprise value of Rs 5,000 crore.

"The company either directly or through its wholly owned subsidiary, shall acquire both the Jojobera and Sonadih cement business from Lafarge India Pvt," the company said in a filing to the Bombay Stock Exchange.

 

The transaction would be funded through existing cash reserves and incremental debt, and is subjected to approval of Competition Commission of India (CCI) and other relevant regulatory approvals, the company said.

"The acquisition business has a demonstrated track record of operational and commercial excellence with profitability amongst the highest in the industry aided by raw material linkages, strong distribution networks and excellent brand loyalty in the attractive Eastern India cement market," the company said in a statement.

Upon completion of this transaction, Birla Corp will consolidate its position in the east where demand supply scenario and outlook continue to remain buoyant.

Commenting on the development, Birla Corporation, Chairman, Harsh Lodha, said, "I am very pleased to announce this very important transaction in Birla Carp's history. The business together with the Concreto and PSC brands, perfectly fit into our strategic vision and ambition of enhancing our competitiveness in our chosen markets. I am glad to welcome new talent and leaders to our Group, who share our convictions and professional culture."

Meanwhile, shares of the company were trading at Rs 504 a piece, up 11.27 per cent from the previous close at 10:40 hours on BSE.

Story first published: Monday, August 17, 2015, 12:30 [IST]
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