India’s UltraTech to buy Dubai’s ETA Star Cement

* Enterprise value of ETA Star assets at $380 million

* To get cement operations in UAE, Bahrain, Bangladesh

* UltraTech shares drop 4.5 pct as qtrly profit falls 26

MUMBAI, April 29 (BestGrowthStock) – India’s UltraTech Cement
(ULTC.BO: ) said on Thursday it would acquire Dubai-based ETA
Star Cement Co for an enterprise value of $380 million, giving
it direct access to markets in the Middle East and Bangladesh.

UltraTech, which is set to become India’s biggest cement
producer with 49 million tonnes when it gets regulatory
approval to absorb the cement business of a group firm, said it
would have management control of ETA Star.

It did not specify how much equity it would buy nor the
cost, but said the deal would be funded by a mix of debt and
internal accruals.

“The acquisition is in line with our long-term strategy of
expanding our global presence across businesses and consistent
with our vision of taking India to the world,” Kumar Mangalam
Birla, chairman of Aditya Birla Group that controls the firm,
said in a statement.

ETA Star’s manufacturing facilities include a 2.3 million
tonnes a year clinker plant and 2.1 million tonnes grinding
plant, both in the United Arab Emirates, a 0.4-million-tonne
grinding plant in Bahrain and a 0.5-million-tonne grinding
plant in Bangladesh.

UltraTech said the transaction was likely to be completed
by the end of the June quarter, and would be accretive to its
earnings per share.

The company has been awaiting court approval to take over
the cement operations of Grasim Industries Ltd (GRAS.BO: ), a
diversified group company. [ID:nSP337897]

Its main rivals in the 270-million-tonne capacity Indian
market, the world’s second-largest, are Holcim (HOLN.VX: )
controlled ACC (ACC.BO: ) and Ambuja Cements (ABUJ.BO: ).

Earlier, UltraTech posted a 26 percent fall in quarterly
profit, lagging market forecasts and pushing down its shares as
higher input costs and lower realisations took toll. UltraTech
reported January-March profit slipped to 2.28 billion rupees,
on net sales of 19.1 billion rupees. [ID:nBMA007434]

UltraTech shares, valued by the market at $3 billion, were
down 4.5 percent at 1,026 rupees at 0756 GMT, in a firm Mumbai
market (.BSESN: ).

Stock Market Research

($1=44.6 rupees)
(Reporting by Prashant Mehra; Editing by Ranjit Gangadharan)

India’s UltraTech to buy Dubai’s ETA Star Cement