Media reports recently indicated that Aditya Birla Group has acquired Jaypee Group’s cement unit in Gujarat for Rs 3,800 crore. The acquisition includes the Jaypee cement unit’s debt. As per the non-cash deal, UltraTech will take over the Rs 3,650-crore loan of Jaypee’s Gujarat unit and transfer to it Rs 150 crore worth of shares once the transaction is completed.
The worth of Jaypee’s unit fell from Rs 4,300 crore earlier following an economic downturn and concerns over a mine owned by Jaypee. The deal, to be completed in nine months, will increase the gap between UltraTech, already the largest cement company in India, and the Holcim group. While UltraTech’s capacity will increase by five million tonne per annum (mtpa) to 59 mtpa, it is setting up another 10 mtpa capacity by 2016.
Holcim, on the other hand, plans to add around eight mtpa by 2015, which will take the combined capacity of its two group companies – Ambuja Cement and ACC – to 65 mtpa.