Ultra Tech to acquire Century Textiles' cement business
The Board of Directors of Ultra-Tech Cement, at its meeting held on Sunday, approved a scheme of arrangement amongst Century Textiles and Industries and its respective shareholders and creditors, the Aditya Birla Group firm said.
Kumar Mangalam Birla-led Aditya Birla Group company UltraTech said it would acquire the cement business of BK Birla Group company Century Textiles and Industries through a share swap deal, a move which would further consolidate its position as market leader in the segment.
The Board of Directors of Ultra-Tech Cement, at its meeting held on Sunday, approved a scheme of arrangement amongst Century Textiles and Industries and its respective shareholders and creditors, the Aditya Birla Group firm said in a statement.
The shareholders of Century will get one equity share of UltraTech, having a face value Rs 10 each for every eight such equity shares of Century.
The transaction is expected to be completed within 6-9 months, according to an Ultra tech statement.
UltraTech will issue 1.4 crore new equity shares to the shareholders of Century, which will increase its equity capital to Rs 288.58 crore, divided into 28.86 crores equity shares of Rs 10 each, the UltraTech statement said.
The transaction would provide UltraTech opportunity to further strengthen its presence in the east and central markets and extending its footprint in the western and southern markets of the country, the company said.
The operations will be bolstered by economies of scale arising out of synergies in procurement and logistics costs; creation of efficiencies by reducing time to market, enhancing competitiveness as well as customer service, UltraTech further stated.
Other advantages stem from ready to use assets with a strong distribution network, availability of land, railway and other infrastructure.
The acquisition is expected to lead to greater shareholder value creation, the company said.
The transaction is subject to the approval of shareholders and creditors, stock exchanges, NCLT, CCI and all other regulatory approvals as may be required.
Century Textiles has three integrated cement units situated in Madhya Pradesh, Chhattisgarh and Maharashtra with a total capacity of 11.4 million tonnes per annum (mtpa) and a grinding unit in West Bengal of 2.0 mtpa.