UltraTech Cement , India’s number one cement maker, said its board on Sunday approved a $472 million deal to gain control of India Cements, which will bolster its position in the country’s southern states.
The deal comes as the country’s top cement makers vie to dominate a market that is expected to roughly double to $49 billion by 2029 from 2022 levels with an expected infrastructure spending boom under the government of Prime Minister Narendra Modi.
UltraTech, part of India’s Aditya Birla group, will buy a 32.72% stake in India Cements from its promoters and their associates, adding to the 23% stake it bought in June.
After the June stake sale, the promoters of India Cements offered to sell their holding to the Birla group company, UltraTech said in a statement.
UltraTech will pay 39.54 billion rupees ($472.38 million) at 390 rupees per share for the 32.72% stake in India Cements, the statement said.
The acquisition will trigger a so-called open offer requirement that allows UltraTech to buy more shares from public shareholders at the same price, which was a 4.3% premium to India Cement’s last close.
Markets had anticipated that UltraTech would take control of India Cements, a move that will help the Birla group meet its production target of 183.5 million metric tons by the fiscal year to March 2027, said Ashutosh Murarka, a research analyst at Mumbai-based Choice Broking.
“We expect the deal momentum in India’s south to continue,” he said.