Ultratech Cement plans to acquire a 31.6% stake in UAE-based RAK Cement

Aditya Birla Group’s UltraTech Cement announced its intention to acquire a 31.6% stake in RAK Cement Co, a UAE-based company for White Cement and Construction Materials. This acquisition will be executed through UltraTech Cement Middle East Investments Ltd (UCMEIL), a wholly-owned subsidiary of UltraTech Cement in the UAE.

RAK Cement 

RAKWCT was established in September 1980 and has grown to be a significant player in the cement industry. In the calendar year 2021, the company reported a turnover of Rs 482.5 crore, reflecting its substantial market presence and operational capacity.

Acquisition Details

UCMEIL has formally declared its intention to purchase 158,049,610 shares, which constitute 31.6% of RAKWCT’s issued and paid-up share capital. This move aligns with Article 10 of the UAE Securities and Commodities Authority’s Board of Directors rules on the acquisition and merger of public shareholding companies, also known as the takeover code.

Offer Period

The offer period for this acquisition will commence on May 28, 2024, and remain open until June 24, 2024. During this time, shareholders of RAKWCT will have the opportunity to tender their shares for purchase by UCMEIL.

UltraTech’s Market Position

UltraTech Cement, a leading cement manufacturer in India, has a consolidated capacity of 138.39 Million Tonnes Per Annum (MTPA) of grey cement. Its extensive infrastructure includes 23 integrated manufacturing units, 29 grinding units, one clinkerization unit, and eight bulk packaging terminals, showcasing its high production capacity.

Strategic Significance

This investment by UltraTech aims to widen its footprint in the Middle East, leveraging RAKWCT’s established market position. The acquisition is expected to strengthen UltraTech’s presence in the white cement and construction materials category, potentially leading to synergies between the operations of both companies.

Conclusion: In conclusion, UltraTech Cement’s proposed acquisition of a significant stake in RAKWCT showcases its strategic expansion efforts and commitment to strengthening its market position in the UAE and the broader Middle East region.

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.