UltraTech Cement Proposes Acquisition of 31.6% Stake in UAE's RAKWCT

In a strategic move to expand its global footprint, UltraTech Cement, a prominent entity of the Aditya Birla Group, has announced its intention to acquire a significant stake in the UAE-based RAK Cement Co for White Cement and Construction Materials PSC (RAKWCT). This acquisition is set to be facilitated through UltraTech Cement Middle East Investments Ltd (UCMEIL), a wholly-owned subsidiary of the Indian cement giant in the UAE.

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On April 15, UltraTech disclosed that UCMEIL would be investing in 29.39 per cent of the equity share capital of RAKWCT, a firm listed on the Abu Dhabi stock exchange. The investment was declared to be around USD 101.10 million (approximately Rs 839.52 crore) for a 29.39 per cent equity stake at that time. The latest development sees UCMEIL aiming to increase its shareholding with a partial conditional cash offer for acquiring 158,049,610 shares, which represents 31.6 per cent of the issued and paid-up share capital of RAKWCT.

This ambitious acquisition aligns with the regulations set forth in Article 10 of the decision by the chairman of the Securities and Commodities Authority’s Board of Directors, concerning the rules of acquisition and merger of public shareholding companies - the takeover code of UAE. The offer period is slated to commence on May 28, 2024, and will remain open until June 24, 2024.

RAKWCT, established in September 1980, reported a turnover of Rs 482.5 crore in CY21. This move by UltraTech Cement not only signifies its intent to bolster its presence in the international market but also reflects its strategic investment approach towards achieving long-term growth objectives.

UltraTech Cement boasts a consolidated capacity of 138.39 Million Tonnes Per Annum (MTPA) of grey cement. It operates through an extensive network comprising 23 integrated manufacturing units, 29 grinding units, one clinkerisation unit, and eight bulk packaging terminals. This acquisition is poised to further enhance UltraTech's global standing and operational capabilities in the white cement and construction materials sector.