UltraTech Cement has reached a definitive agreement in its deal to buy 21.2Mta of production capacity from Jaiprakash Associates (JAL) at a cost of INR159bn (US$2.4bn).
India's Telegraph newspaper reports that UltratTech will acquire existing plants with a capacity of 17.2Mta as well as a 4Mta grinding unit currently under construction.
Originally, the sale was to include Jaypee’s 1.2Mta Shahabad plant, but this will now be retained by JAL, which will still have 10.6Mta of production capacity after the transfer of its other assets to UltraTech.
The Telegraph reports that the deal is expected to take 12-14 months to complete, after which UltraTech will have increased its capacity to 91.1Mta. The acquisition includes the transfer of around INR115bn (US$1.7bn) of debt to UltraTech, which will also pay INR4.7bn (US$70m) to complete the grinding unit.