CCI Approves Ultra Tech Cement’s ₹ 7,600 crore buyout deal of Kesoram’s cement business

The Competition Commission of India (CCI) has approved the acquisition of Kesoram’s Cement Business by UltraTech Cement Limited. The deal is estimated to be valued at ₹7,600 crore, including the debt the company will take on from Kesoram.

The proposed combination relates to the acquisition of the grey cement business of Kesoram Industries Ltd by UltraTech Cement Ltd.

UltraTech Cement, the flagship company of Aditya Birla group, had in November last year announced that it has acquired the cement business of Kesoram Industries in a share-swap deal.

As per the deal, UltraTech will be issuing one share for every 52 shares of Kesoram Industries.

Post-acquisition, UltraTech’s annual cement capacity will reach 149.14 mt, including its overseas operations. The proposed transaction will accelerate UltraTech’s path to achieve the stated goal of 200 million tonnes per annum (mtpa) in India. 

UltraTech is a subsidiary of Grasim Industries Ltd. Kesoram Industries is engaged in the manufacture of grey cement through the Kesoram cement business. Kesoram is also engaged in the businesses of rayon, transparent paper and chemicals in India, which are not covered in this combination.

SHRIRAM INVESTMENT

The CCI has approved the proposed acquisition of certain shareholding of Shriram Investment Holdings Pvt Ltd (SIHL) by Shriram Ownership Trust (SOT).

The proposed combination relates to the acquisition by SOT of 9.44 per cent and 20 per cent stake of Shriram Investment Holdings Private Ltd (SIHL) held by APRN Enterprises Private Ltd (APRN) and Piramal Enterprises Ltd (PEL), respectively. 

SIHL is an unregistered core investment company with a standalone asset size of ₹3,976 crore and a turnover of ₹ 1,881 crore as of March 31, 2023. 

SIHL does not have any business of its own except investments in various companies, most of which are 100% subsidiaries of SIHL. SOT and SCPL are already holding 70.56% of the SIHL.

The Shriram Group wants to increase its holding in SIHL and its financial services business by acquiring stake from PEL and APRN. These two shareholders, being minority shareholders, expressed their interest in favour of the exit. SOT, being the existing shareholder of the SIHL, proposes to acquire the stake from the two shareholders (PEL and APRN).