The shares of cement behemoth UltraTech Cement Ltd were trading in the green and 1% higher on 27 December after the company announced acquiring an 8.69% stake in Star Cement Ltd for a total consideration of Rs 851 crore.
As a part of the deal, the company will acquire 3.7 crore equity shares of Star Cement at an average price of Rs 235 per share, excluding taxes and other costs.
Following suggestions from the promoters of Star Cement and promoter group companies to sell their ownership shares, UltraTech Cements made the decision to invest. The agreement was made during the UltraTech Cements board meeting earlier on 27 December.
UltraTech has strategically invested in a minority, non-controlling stake in the company with this move.
Furthermore, during a block deal session, Star Cement saw a substantial exchange, with 3.36 crore shares or 8.3% of the company’s equity changing hands for Rs 766 crore. As a result, Star Cement’s stock rose more than 7% to Rs 247.30 at 9.20 am.
Earlier this month, on 20 December, the Competition Commission of India said that it had approved UltraTech Cement Limited’s acquisition of India Cements Limited (ICL).
UltraTech Cement said earlier this year in July that it would pay Rs 3,954 crore to acquire a 32.72% stake in India Cements from promoters and their associates in an attempt to strengthen its position in the very competitive and quickly growing southern cement market, particularly in Tamil Nadu.
Additionally, an open offer of Rs 3,142.35 crore has been announced to purchase 26% of ICL from its owners.
The Indian cement business is concentrating on 2025 in an effort to boost sales realization, raise profits, and speed up demand as two corporate houses merge and become more competitive. Thanks to higher government expenditure on costly infrastructure projects, it expects sales to rise by about 8%.
However, at 12:23 pm, the shares of UltraTech Cement shed all their early gains and were trading 0.27% lower at Rs 11,429.15 on NSE.
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