India's UltraTech Cement said on Thursday it will buy the cement business of Kesoram Industries in an all-stock deal valued at 53.79 billion rupees ($645.41 million), boosting its capacity ambitions in a highly competitive sector.
As a part of the deal, UltraTech will issue one share for every 52 shares of Kesoram and give UltraTech ownership of two integrated cement units in southern Indian states of Karnataka and Telangana.
The deal implies an offer price of 173.15 rupees per share, a 24.2% premium to Kesoram's last close.
"The transaction will provide UltraTech the opportunity to extend its footprint in the highly fragmented, competitive and fast growing Western and Southern markets in the country," UltraTech said in a statement.
The proposed transaction will accelerate UltraTech's path to achieving its stated goal of 200 million tons per annum (mtpa) cement capacity in India, it added.
