In a move that would further consolidate its position in the market, UltraTech Cement on Sunday said it would acquire the cement business of BK Birla Group company Century Textiles and Industries through a share swap deal.
In a move that would further consolidate its position in the market, UltraTech Cement on Sunday said it would acquire the cement business of BK Birla Group company Century Textiles and Industries through a share swap deal. A scheme of arrangement amongst Century Textiles and Industries and its respective shareholders and creditors was approved by the board of directors yesterday. “The Board of Directors, at its meeting held today, have approved a Scheme of Arrangement amongst Century Textiles and Industries Limited (“Demerged Company”), Ultra Tech Cement Limited (“Resulting Company”) and their respective Shareholders and creditors for the acquisition of the Cement Business (as defined in the Scheme) of the Demerged Company. Post effectiveness of the Scheme, equity Shares of the Resulting Company shall be issued to the eligible shareholders of the Demerged Company,” the company said in an exchange filing.
All about deal
The shareholders of Century would receive one equity share of UltraTech, having a face Rs 10/- each for every eight equity shares of Century of face value Rs 10 each. The buyout would help the company’s earnings positively, UltraTech said. The company may also be able to extend its presence in the Western and Southern markets and strengthen its presence in the Eastern and Central markets, it said. The acquisition is expected to be completed within 6-9 months, the company said.
UltraTech also maintained that the company operations will be strengthened by economies and scale; creation of efficiency by reducing time to market, enhancing competitiveness as well as customer service.
The ready to use assets with a strong distribution network, availability of land, railway and other infrastructure also provide additional advantages. The company also said that the acquisition is expected to lead to greater shareholder value creation.
“The transaction is subject to the approval of shareholders and creditors, stock exchanges, NCLT, CCI and all other regulatory approvals as may be required,” the company said.