KOLKATA: Aditya Birla Group flagship UltraTech Cement has announced a share swap ratio of 1:52 for the acquisition of Kesoram Industries from BK Birla Group. Additionally, it announced an entry into the wires and cables business with an investment of Rs 1,800 crore. The acquisition scheme, effective from March 1, will entail an issuance of one share of UltraTech against 52 shares of Kesoram.
The enterprise value of Kesoram is estimated to be Rs 7,600 crore, encompassing both equity and debt. UltraTech was supposed to absorb Kesoram's debt, which stands at about Rs 1,700 crore.
UltraTech will build a wires and cables plant in Bharuch, Gujarat, by December 2026. The move will mark the Aditya Birla Group's entry into the wires and cables industry, which has witnessed revenue CAGR of around 13% between fiscals 2019 and 2024, and will compete against established players like Finolex Cables, RR Kabel, Polycab India and Sterlite Technologies.
"The proposed entry into this segment of the construction value chain, through its Building Products Division, is in line with the company's strategy to strengthen its position as a comprehensive Building Solutions provider. UltraTech proposes to leverage its extensive manufacturing expertise coupled with its connect with the end-customers to deliver high-quality wires and cables thereby targeting a higher share of the customers wallet," Ultratech has stated.
Kesoram's cement business comprises two integrated cement units in Sedam, Karnataka and Basantnagar in Telangana, with a combined capacity of 10.7 million tonnes per annum (mtpa). After the merger, UltraTech's cement capacity will escalate to 149 mtpa.
Stay informed with the latest business news, updates on bank holidays and public holidays.
Unlock Investment Potential: Enroll in ET's Stock Valuation Workshop - Batch 3. Secure Your Spot Now!