Nirma Group Arm To Buy Emami's Cement Business In INR 5,500 Crore Deal
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Indian conglomerate Emami Group will sell its cement business to Nuvoco Vistas Corp, an arm of Nirma Group, in a deal valued at INR 5,500 crore, Nuvoco said on Thursday.
Emami Cement currently operates one integrated cement plant in Risdah, Chhattisgarh and grinding units in Bihar, West Bengal and Odisha with a capacity of 8.3 million tonnes per year. The company has mining leases in Chhattisgarh, Rajasthan and Andhra Pradesh.
Kolkata-based Emami Group, which has interests ranging from consumer goods to pharma retail, will be selling all of their shares in the business as part of the deal. Emami’s promoters had sold a cumulative 20 per cent stake last year in two tranches, in its fast moving consumer goods unit, the BSE-listed Emami Ltd, as part of its plans to cut down debt.
This acquisition from Nuvoco comes about 4 years after Nirma bought the company from Switzerland-headquartered LafargeHolcim for $1.4 billion. Nuvoco Vistas, the new name of the company, was registered in 2017. Apart from cement, the company also sells ready mix concrete and aggregates, and other value added products.
With the Emami Cement merger, Nuvoco said it would become one of the biggest players in the cement industry in India, especially in the east. This will bring its total cement capacity in eastern, northern and western India to 23.5 million tonnes (including a capacity expansion plan in one of its plants) and over 60 ready-mix plants.
The combined entity’s operations will span three facilities in Chhattisgarh, two each in Rajasthan and West Bengal, and one each in Bihar, Jharkhand, Odisha, and Haryana. Nuvoco’s cement sales will spread across 12 states.
“This acquisition is a momentous and transformational step in Nuvoco’s journey to becoming a major building materials company in India delivering superior performance,” Nuvoco chairman Hiren Patel said in a statement. Ahmedabad-based Nirma makes a wide variety of products including cosmetics and detergents. It has over 12 manufacturing facilities in India and the US and sells its products across 6 continents.
Nuvoco said the deal was subject to approval by the Competition Commission of India.