Birla Corp goes shopping for Rs 5, 000 crore

Birla Corporation announced on Monday that it would acquire two cement units of Lafarge India in Jharkhand and Chattisgargh. These units would be sold through a slump sale for an enterprise value of Rs 5,000 crore.

The French company has decided to sell its units to conclude its mega global merger with Holcim Ltd, reported the Economic times.

The transaction would be funded through existing cash reserves and incremental debt, and is subject to approval of Competition Commission of India.

Birla Corp will acquire an integrated cement unit at Sonadih, a cement grinding unit at Jojobera, along with Concreto and PSC brands. The plants have a total cement capacity of 5.15 million tonnes per annum (mtpa).

"The acquisition business has a demonstrated track record of operational and commercial excellence with profitability amongst the highest in the industry aided by raw material linkages, strong distribution networks and excellent brand loyalty in the attractive Eastern India cement market," the company said in a statement.

After the completion of this transaction, Birla Corp will consolidate its position in the east where demand supply scenario and outlook continue to remain buoyant.

Birla Corp, established in 1919, is part of the MP Birla Group with presence across cement and jute; cement constitutes over 90% of the company's revenues with a total operational cement capacity of 10 mtpa, it has units in Rajasthan, Madhya Pradesh, Uttar Pradesh and West Bengal.

After the transaction, Birla Corp will have a total capacity of 15 mtpa. With addition of these brands to its existing basket of brands, Birla Corp will derive synergy benefits through consolidation of its capacity.

Harsh Lodha, Chairman of Birla Corp, said: "I am very pleased to announce this very important transaction in Birla Carp's history. The business together with the Concreto and PSC brands, perfectly fit into our strategic vision and ambition of enhancing our competitiveness in our chosen markets. I am glad to welcome new talent and leaders to our Group, who share our convictions and professional culture.

(Image: Indiatimes)