New Delhi, May 17 :
The K.K.Birla group-owned Zuari Industries has sold a 50 per cent stake in its Andhra Pradesh-based cement plant to European major Italcementi.
Ashish Guha of Lazard Capital, who advised Italcementi on the deal, said: 'We can't talk about the sale price.' Stock exchange officials, who were in the know about the deal, said 'the cement unit is valued Rs 740 crore.'
Zuari has already spun off its cement division into a separate company in which a 50 per cent stake will now be held by Italcementi. The Italian firm has been trying to enter the Indian cement market for some time.
The Italcementi group has been making slow inroads into the Asian market with acquisitions in Thailand of Jalaprathan Cement in 1998 and Asian Cement in 1999. The deal with Zuari will now give it a toehold in the Indian cement market, the third largest in the world, in combination with a very important partner.
With a staff of about 18,000 people, the Italcementi group is an industrial group with a presence in 13 countries. The group activity is focused on cement and is integrated with ready-mixed concrete and aggregates activities.
In 1999, the Italcementi group had registered sales of 3,400 million euros, its operating income was 510 million euros, and its cash flow 541 millions euros.
With 57 cement plants, 165 quarries and 533 batching units, the Italcementi group is the largest European cement producer and one of the leaders in the world, with one of the most advanced technical and research centres.
When Zuari Industries Ltd spun off its 1.7 million tonne cement division into a separate company, the move was widely seen as a signal that it would either exit from the cement business or take on a partner in an industry which was getting increasingly competitive and witnessing a spate of mergers and acquisitions.
It was also seen as sign that the K K Birla promoted company would eventually concentrate on its core business which is fertilisers.
Consequent to this, the industry was rife with rumours of global cement giant Cemex SA De CV Mexico, the third largest cement company in the world leading the list of suitors. Apart from Cemex, other cement giants that were believed to be in the fray included Lafarge and Holderbank. Recently reports had also suggested that Ciments Francaise was also one of the suitors.
Zuari had recently completed a Rs 357 crore exercise in expanding the capacity of its cement unit from 500,000 tonnes per annum to around 1.7 million tonnes. The company's core business was identified as fertilisers and it promoted Chambal Fertilizers.
Zuari made a foray into cement by taking over the cement division of its group company Texmaco. The transfer price that the engineering company Texmaco received was in the region of Rs 135 crore.
Saturday, 17 May 2025