Aditya Birla group company Ultratech Cement acquired Jaypee Cement Corporation's 4.8 million tonne cement manufacturing unit in Gujarat for Rs. 3,800 crore. Ultratech Cement did not pay cash for the deal but took over Jaypee's Rs. 3,650 crore debt and issued Rs. 150 crore in shares. The acquisition increases Ultratech Cement's capacity to an unassailable 59 million tonnes annually, making it larger than its nearest competitor. The deal strengthens Aditya Birla Group's position in the cement industry through significant presence in western Indian markets and access to a jetty for international shipments.

1. Presented by:
Nagesh Charugundla

2. Introduction

In one of the largest domestic M&A deals of
recent times, Aditya Birla group company
Ultratech Cement would announced the
acquisition of Jaypee Cement Corporation's
(JCCL) Gujarat unit for Rs 3,800 crore.

3. Aditya Birla Group
UltraTech Cement Limited (BSE: 532538) is
India's biggest cement company and India’s
largest exporter of cement clinker based in
Mumbai, India.
 The company is division of Grasim Industries. It
has an annual capacity of 52 million tonnes.
UltraTech is India's largest exporter of cement
clinker four in India and one in Sri Lanka. Most
of the plants have ISO 9001, ISO 14001 and
OHSAS 18001 certification.


4. Jaypee Cements
Jaypee group is the 3rd largest cement
producer in the country. The groups cement
facilities are located in the Satna Cluster
(M.P.), which has one of the highest cement
production growth rates in India.
 The Group is committed towards the safety and
health of employees and the public. Our motto
is
“Work For Safe, Healthy, Clean & Green
Environment “.


5. Here are the top ten things
about the deal



1. The deal will further cement UltraTech’s numero uno
position in the market and give it an entry into Gujarat.
“With this acquisition of 4.8 million tonne capacity, our
installed capacity will increase to 59 million tonnes per
annum.
2. The Birla takeover is a lifeline for infrastructure
major Jaypee Group. Jaypee Cement (JCCL) is a
wholly owned subsidiary of Jaiprakash Associates.
3. UltraTech Cement expects savings of nearly Rs 40
core a year from synergies. the company expects to save
costs in the medium to long term from this plant.

6. 4. Jaypee Cement had Rs 350 crore of carry forward
losses.
 5. Jaiprakash Asssociates expects to close the deal in
the next 7-9 months after statutory approvals
including those from the court and the CCI
(Competition Commission of India).
 6. The Gujarat operation consists of a 3.6 million
tonne clinker plant at Kutch with 2.4 mn tonnes of
cement grinding capacity.
 7. The Jaypee Group’s cement capacity will come
down to 33 million tonnes and it will continue to be
the third-largest cement manufacturer in the country
after adding into Aditya Birla group.


7. 8. UltraTech will take over the Rs 3,650-crore loan of
Jaypee’s Gujarat unit and transfer to it Rs 150 crore
worth of shares once the transaction is completed.
 9. According to a Kotak report, The valuation is
comparable to the $133 per tonne that Ambuja
Cements is estimated to be paying for a stake in
ACC’s units.
 10. The deal would give UltraTech Cement a
significant presence in the key western Indian
markets as well as access to a jetty that would enable
it to ship cement to new markets.


8. Aditya Birla Group It bought Jaypee Cement Corporation’s 4.8million-tonne cement manufacturing unit in Gujarat for an
enterprise value of R3,800 crore, without forking out any cash but
taking on the latter’s debt of Rs3,650 crore.
issuing shares for a value of R150 crore.
UltraTech’s capacity climbs to an unassailable 59 mt, bigger than
the 57.25 mt.

9. ADDING STRENGTH TO ADITYA BIRLA
GROUPS
VALUE
VALUE
VALUE
VALUE
VALUE
2,472.61
15 nov’09
779.31
20 jan’05
571.83
21 may’04
563.55
30 jan’06
397.26
3 May’06
Target
Target
samrudternd ACC
hi Cement
Target
Ulteratech
Cement
Target
Ambuja
Cements
Target
Ambuja
Cements
Eastern
Acquirer
Ulteratech
Cement
Acquirer
Grasim
Industries
Acquirer
Holcim
Acquirer
Ambuja
Cements
Acquirer
Ambuja
Cements

10. Profits of Aditya Group(Ultratech
Cements+Jaypee cements)
UltraTech Cement, an Aditya Birla Group
company, reported that its net profit was down
13% at Rs 673 crore (Rs 778 crore).
 The shares of Aditya Birla Group is incresed by
22%.


11. BIRLA SHOPPING CART
2004:Grasim acquires a controlling stake in Ultratech,a cement
company.
2007:Hindalco acquires Atlanta-headquartered.$6 the largest aluminum
rolling company.
2008:idea celular buys Spice communication from B K Modi for
3,240cr.
2010:Ultratech buys a majority stake abd management control in
Dubai-Based Star Cement.
2011:Birla group takes over bio-refinery company for $340mn and
birla takes Atlanta-based columbian chemicals for $875mn to
become the world’s largest producer for carbon black.
2012:Birla buys terace bay pulp mill in North Westren Ontario for
$110mn
2013:Ulteratech buys Jaypee’s Gujarat cement units for 4000cr.

12. Conclusion:

Aditya Birla Group Mangalam Birla said the
transaction would add 5mt to Ultratech’s
capacity and give it a significent presence in
the weatern Indian Markets.