Kesoram Industries, on 30 November, announced that its Board of Directors have approved to merge its cement business with UltraTech Cement on a share swap basis.

The shareholders of the company will receive one share of UltraTech Cement for every 52 shares held.

The demerger and merger will help the company in deleveraging the balance sheet, including reduction of debt and outflow of interest, and unlock the value of the cement business.

The company’s business consists of two integrated cement units at Basant Nagar, Telangana and Sedam, Karnataka, with a total capacity of 10.75 million tonnes per annum (mtpa). Out of the total capacity of 10.75 mtpa, 8.50 mtpa is clinker based and 2.25 mtpa is surplus grinding capacity. The company also has a 0.66 mtpa packing unit in Solapur, Maharashtra.

This merger will provide UltraTech Cement with an opportunity to extend its footprint in the highly competitive, fragmented, and fast-growing Western and Southern markets in India. It will also help UltraTech Cement’s geographic reach in Southern markets such as Telangana, where they don’t have a cement manufacturing plant.

The merger is subject to the approval of shareholders, stock exchanges, CCI, NCLT, creditors, and any other regulatory authorities as may be required.

The transaction is expected to be completed within 9-12 months prior to the regulatory approvals.