India's UltraTech Cement will buy an 8.69% stake in Star Cement, it said on Friday, in a deal that could be valued at up to 8.51 billion rupees ($100 million) and firm its leading position in the sector.
UltraTech said it would pay not more than 235 rupees per Star Cement share, which is a 2% premium to the stock's closing price on Thursday.
There has been a wave of deals ever since billionaire Gautam Adani's ports-to-power conglomerate entered the cement industry in 2022 to challenge Aditya Birla Group-owned UltraTech's pole position in the market.
UltraTech's latest deal comes weeks after local media had reported that the Adani Group was considering an acquisition of Star Cement, the biggest producer in the country's north-east.
Star Cement's shares jumped 7% in early trading to 247 rupees, above the maximum offer price, which usually implies that investors are expect a higher offer or a rival bid.
UltraTech's shares were up 0.7%.
Star Cement, like many small cement mills, has suffered from larger competitors vying for market share. Its annual sales growth expected to slow to 6.8% this fiscal year, from 22% in 2023, according to an estimate by brokerage Nirmal Bang.
