Kumar Birla re-enters race to buy Orient Cement to consolidate Ultratech's Southern push
UltraTech is in advanced negotiations with the promoter of Orient Cement Ltd (OCL), his uncle CK Birla, after restarting talks in recent weeks, amid intensifying consolidation efforts in the sector, said people familiar with the discussions.
Kumar Birla's renewed efforts to buy Orient are seen as an attempt to trump Adani Cement and consolidate UltraTech’s position in the southern and western markets, especially Maharashtra and Telangana, after buying a 23% stake in India Cements at the end of last month. Adani Cement, which controls India's second largest cement capacity, has been engaged in talks with CK Birla since late last year but is said to have baulked at the valuation sought.
UltraTech’s spokesperson was unavailable for comment. Deepak Khetrapal, MD and CEO of OCL, denied discussions were taking place and any talk of sale plans was a “figment of one’s imagination.”
The promoter stake in Orient Cement held by the Birla family and private investment vehicles is 37.9%. The company has a market value of Rs 6,290.50 crore, having almost doubled from Rs 3,878 crore in October when ET first reported on CK Birla’s approach to Adani.
UltraTech is said to have offered a price of Rs 350-375 per share, a 22% premium to the current market price of Rs 307. In the past month, the Orient Cement stock has shot up 45%, hitting an all-time high of Rs 329 on July 1, largely on speculation that an acquisition deal was near conclusion.
The UltraTech offer translates to an enterprise value of Rs 7,300-7,800 crore
