Ultratech Cement plans to acquire 31.6% stake in UAE’s RAK Cement

UltraTech Cement Bids for 31.6% Stake in UAE’s RAK Cement Co

UltraTech Cement has made a significant move in the global cement industry by announcing an offer to acquire a 31.6 percent stake in UAE-based RAK Cement Co for White Cement and Construction Materials PSC (RAKWCT). This acquisition will be executed through UltraTech’s wholly-owned subsidiary, UltraTech Cement Middle East Investments Ltd, headquartered in the UAE. The offer period is set to open on May 28 and will remain open until June 24, providing a window for the stakeholders to respond.

This strategic acquisition comes after UltraTech previously disclosed plans to invest $10.10 million (approximately Rs 839.52 crore) to secure a 29.39 percent equity share in RAK Cement Co. The company aims to leverage its substantial expertise in white cement manufacturing to enhance RAK Cement’s operational and market capabilities both locally and globally. This acquisition is part of UltraTech’s broader strategy to expand its footprint and influence in the international cement market.

RAK Cement Co, listed on the Abu Dhabi Stock Exchange, has a storied history dating back to its incorporation in September 1980. Over the years, it has established itself as a significant player in the regional cement industry. The company reported a robust turnover of Rs 576.30 crore in 2023, which marks a 7 percent increase from the previous year’s turnover of Rs 537.40 crore in 2022 and Rs 482.50 crore in 2021. This consistent growth underscores RAK Cement’s strong market position and operational efficiency.

UltraTech Cement, a titan in the global cement industry, boasts a consolidated grey cement capacity of 138.39 million tonnes per annum (MTPA). The company operates an extensive network of 23 integrated manufacturing units, 29 grinding units, one clinkerisation unit, and eight bulk packaging terminals. This vast operational infrastructure enables UltraTech to meet the diverse needs of its global customer base effectively.

The company reported impressive financial results for the March quarter of FY25, surpassing market expectations. UltraTech’s net profit surged by 35 percent year-on-year to Rs 2,258.58 crore, significantly higher than Moneycontrol’s estimate of Rs 1,976.58 crore. This remarkable profit growth was driven by robust demand for building materials and a strategic reduction in operating costs. Concurrently, UltraTech’s revenue also witnessed a notable increase, rising by 9.4 percent year-on-year to Rs 20,418.94 crore.

On May 27, UltraTech Cement’s shares closed at Rs 10,225.50 on the National Stock Exchange (NSE), reflecting a stable market performance. This financial stability, coupled with the strategic acquisition of a significant stake in RAK Cement Co, positions UltraTech Cement for continued growth and expansion in the global cement industry.

The acquisition is expected to create synergies that will enhance the operational efficiencies and market reach of both UltraTech and RAK Cement. By combining UltraTech’s advanced manufacturing technologies and extensive industry experience with RAK Cement’s established market presence in the UAE, the partnership aims to deliver superior value to customers and stakeholders alike.

UltraTech Cement’s strategic investment in RAK Cement Co marks a pivotal step in its expansion strategy, reinforcing its position as a global leader in the cement industry. This move not only broadens UltraTech’s international footprint but also enhances its capacity to serve a growing global market with high-quality cement products.