UltraTech Cement updates its offer to acquire a 25% stake in UAE-based RAKWCT
Aditya Birla Group Firm Adjusts Investment Strategy, Reduces Share Acquisition to 12.50 Crore Shares in UAE-Based RAKWCT
UltraTech Cement Revises RAKWCT Acquisition Deal to 25% Stake
New Delhi: Almost a month after making an offer to acquire 31.6 percent in UAE-based RAKWCT, Aditya Birla group firm UltraTech Cement on Tuesday said it has revised the deal to 25 percent. UltraTech had initially announced on May 27 that it had made an offer to acquire 31.6 percent in UAE-based RAK Cement Co for White Cement and Construction Materials PSC (RAKWCT) and intended to acquire 15.80 crore shares.
“This offer was revised to 12.50 crore shares of RAKWCT representing 25 percent of the share capital of RAKWCT,” UltraTech Cement said in a regulatory filing on Tuesday. This change indicates a strategic adjustment in their investment approach, reducing the scale of their intended acquisition.
The offer is made by UltraTech Cement Middle East Investments Ltd (UCMEIL), a wholly-owned subsidiary of the Indian cement maker in the UAE. This subsidiary serves as the vehicle for UltraTech Cement’s international investments and operations, enabling the company to extend its reach in the Middle East market.
The offer period ran for 28 days from 28th May, 2024 to 24th June, 2024. This specific time frame provided a window for the transaction to be evaluated and processed under regulatory and corporate governance frameworks, ensuring that all necessary due diligence was conducted.
On April 15, UltraTech had informed that UCMEIL will invest in 29.39 percent equity share capital of ‘Ras al Khaimah Co. for White Cement and Construction Materials PSC’ (RAKWCT), a company listed on the Abu Dhabi stock exchange. This earlier announcement set the stage for UltraTech’s strategic entry into the UAE market, aiming to leverage RAKWCT’s established presence and market share in the region.
It had announced an investment of USD 101.10 million (around Rs 839.52 crore) for a 29.39 percent equity at that time. This significant investment underscores UltraTech’s commitment to expanding its footprint in the global cement industry, particularly in the white cement sector, which has unique applications and market dynamics.
RAKWCT was incorporated in September 1980 and had a turnover of Rs 482.5 crore in CY21. This historical context highlights RAKWCT’s longstanding presence and performance in the industry, providing a stable and attractive investment opportunity for UltraTech.
UltraTech has a consolidated capacity of 152.7 million tonnes per annum of grey cement. This extensive production capacity makes UltraTech one of the leading cement producers globally, and its foray into the white cement market through this acquisition aligns with its strategy to diversify its product portfolio and enhance its competitive edge.
Overall, UltraTech’s revised deal to acquire a 25 percent stake in RAKWCT reflects a calculated move to balance its investment scale while solidifying its position in the Middle Eastern cement market. This strategic acquisition is expected to create synergies, expand market reach, and contribute to UltraTech’s long-term growth objectives.
