UltraTech Cement Adjusts Acquisition Offer to 25% Stake in UAE’s RAKWCT

UltraTech Cement Limited, an Indian multinational cement company based in Mumbai, is the largest manufacturer of grey cement, ready-mix concrete, and white cement in India. It was originally founded in 1983 as the cement division of Larsen & Turbo (L&T). However, in 2004, in a demerger deal, Grasim Industries obtained management control of UltraTech CemCo (later renamed UltraTech Cement) with its 51% stake, while L&T retained 11.5% shareholding. The company is now the cement flagship company of Aditya Birla Group with a market cap of Rs. 3.20 Lakh crores.

Recent acquisitions:

UltraTech Cements, through its wholly-owned subsidiary in UAE, UltraTech Cement Middle East Investments Limited, had acquired a 29.39% state in Rak Cement Co. for White Cement and

Construction Materials PSC’, (“RAKWCT’), according to an exchange filing dated 15th April 2022. RAK Cement Co. for White Cement and Construction Materials PSC (RAKWCT) is a company situated in Ras Al Khaimah, and listed on the Abu Dhabi and Kuwait stock exchanges. RAKWCT had reported a turnover of Rs 482.5 crore in CY21. The company is listed on the Abu Dhabi and Kuwait exchanges. This together with the existing shareholding, resulted in UCMEIL holding 29.79% of RAKWCT’s equity share capital. This acquisition aimed to expand the cement manufacturer’s operations locally and globally and to introduce new products to Rak Cement’s production portfolio.

New amends:

On 27th May 2024, UltraTech Cement notified its intention of making a partial conditional cash offer for acquiring 158,049,610 shares, representing 31.6% of the issued and paid-up share capital of RAKWCT. The offer period would have remained open from 28th May 2024 and remain open upto 24th June 2024. Not even a month later, the cement manufacturer revised its offerings to 125,039,250 shares of RAKWCT representing 25% of the share capital of RAKWCT. This announcement came after the offer period ended on 24 June 2024. The company has also been notified that the final allotment of shares in terms of local regulations will be announced after the meeting of the shareholders of RAKWCT to be held on 9th July 2024. 

Conclusion: The cement manufacturer has revised its plans to buy a 31.6% stake in the UAE-based Rak Cement, down to 25%. The shares of the cement company, post announcement opened at Rs 11,042.15 on the NSE, up 1.8 percent from the previous close.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.