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Kumar Mangalam Birla-led UltraTech Cement, which has expanded its business largely by big ticket acquisitions, is now eyeing the assets being divested by Lafarge and Holcim in Europe and Brazil as part of their merger plans.
Even as a UltraTech Cement spokesperson refused to comment “on market speculation,” Daljeet S Kohli, Head of Research, IndiaNivesh Research, said it all depends on the quality of assets, pricing and the market potential.
“UltraTech has strengthened its position in the domestic market with the recent acquisition of JP Associates’ five million tonnes of cement capacity in Gujarat,” he added.
Lafarge and Holcim have put a few assets on the block globally to reduce their dominance in a particular region.
Both the companies have placed a proposal before the Brazilian competition authority to sell three integrated cement plants and two grinding stations with annual capacity of 3.6 million tonnes and a ready-mix plant all located in the south-eastern Brazil.
Overseas marketsUltraTech, which has operations in the UAE, Bahrain, Bangladesh and Sri Lanka and is one of the largest exporters of cement, is seeking to expand its footprint in the overseas markets.
The Aditya Birla group, which has taken the brownfield path to grow its cement business, acquired L&T’s cement business in 2003 and rechristened it UltraTech Cement.
As part of consolidation of businesses within the Group, Grasim Industries spun off its cement interests to merge it with UltraTech.
Grasim owns 60 per cent of UltraTech.
UltraTech plans to increase its installed cement capacity from 62 million tonnes per annum to 70 mtpa by early 2016.
Besides UltraTech Cement, sources said Irish cement-maker CRH, Mexico’s Cemex, Germany’s HeidelbergCement and Brazil’s Votorantim Cimentos SA may also consider a joint bid for the entire Lafarge/Holcim portfolio, which is valued at $8.85 billion.
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