UltraTech, under the leadership of Kumar Mangalam Birla, is currently engaged in advanced negotiations to acquire Orient Cement Ltd (OCL) from CK Birla, according to a report from Economic Times. This move marks a renewed effort amidst significant consolidation activities in the cement sector. UltraTech aims to outbid Adani Cement and enhance its presence in southern and western markets, particularly Maharashtra and Telangana. Recently, UltraTech acquired a 23% stake in India Cements, signaling its robust expansion strategy.
Sources familiar with the matter revealed to ET that UltraTech has proposed a price range of Rs 350-375 per share for Orient Cement, offering a substantial premium over its current market price. This valuation values Orient Cement at around Rs 7,300-7,800 crore ($840-$938 million), aligning with recent industry transactions.
However, discussions are ongoing, and the final agreement hinges on reaching a consensus on valuation. If successful, the acquisition could significantly bolster UltraTech’s goal of achieving a capacity of 200 million tons per annum (MTPA) by 2027, strengthening its position as a key player in the cement industry.
Orient Cement, headquartered in Bhuvneshwar, reported a Q4FY24 revenue growth of 8.5% to Rs 3,200 crore and a 42% rise in net profit to Rs 174 crore annually. The company’s strategic focus on expanding into northern markets and increasing sales of premium cement underscores its growth trajectory and attractiveness in the market.
Neither UltraTech nor Orient Cement has officially commented on these negotiations, with further developments anticipated ahead of Orient Cement’s upcoming quarterly earnings announcement on July 19.
