UltraTech Cement Secures CCI Nod for Rs 7,000 Crore Deal with India Cements

The Competition Commission of India (CCI) has granted unconditional approval for UltraTech Cement’s Rs 7,000-crore acquisition of a majority stake in India Cements Ltd. This strategic move, announced on July 28, 2024, includes a 32.72% stake purchase from India Cements’ promoters and a Rs 3,142.35 crore open offer for an additional 26% stake.

This acquisition bolsters UltraTech’s presence in the competitive southern market, especially in Tamil Nadu, where its footprint has been limited. The southern region, characterized by rapid growth and high demand, is witnessing fierce rivalry between the Aditya Birla Group and the Adani Group.

UltraTech’s acquisition, finalized under Section 31(1) of the Competition Act, 2002, consolidates its leadership with a current production capacity of 156.66 million tonnes per annum (MTPA). Meanwhile, the Adani Group is scaling its capacity to 140 MTPA by FY28 through acquisitions like Sanghi Industries, Penna Industries, and Orient Cement.

UltraTech also plans to achieve 200 MTPA capacity by FY27 through expansions and acquisitions, including the proposed takeover of Kesoram Industries’ cement business, pending regulatory clearances.

This deal marks the first unconditional CCI approval following a show cause notice under the amended merger control regime. Legal firm J Sagar Associates, representing UltraTech, highlighted the significance of this precedent, achieved within 25 days of filing the first Form II merger notification under the new rules effective from September 10, 2024.

The Indian cement industry, poised for consolidation, is witnessing a battle for dominance between Kumar Mangalam Birla’s Aditya Birla Group and Gautam Adani’s Adani Group, with both aggressively pursuing inorganic growth to capture market share.

This acquisition not only strengthens UltraTech’s position but also underscores the intensifying competition reshaping India’s cement landscape.