UltraTech Cement Ltd has revised the price at which it will buy the cement division of Jaiprakash Associates Ltd to Rs.15,900 crore from Rs.16,500 crore while signing a definitive agreement for the purchase. The final price has been revised as Jaiprakash’s Karnataka cement assets have been dropped from the deal.
“The parties have agreed to exclude the 1.2 million tonne capacity in the state of Karnataka as envisaged earlier,” UltraTech Cement said in a statement to the BSE on Thursday. The statement added that a definitive agreement has been signed for the purchase of 21.20 million tonnes in cement capacity located across five states.
In addition to the Rs.15,900 crore, UltraTech will pay Rs.470 crore on the completion of Jaiprakash’s under-construction capacities, which are part of the deal, the company added.
“It is a good decision to limit exposure to the south India market. The Rs.15,900 crore is a reasonable valuation, not very cheap or expensive for UltraTech,” said Amey Joshi, associate director (corporate) at India Ratings and Research, the local unit of Fitch Group Inc.
On 28 February, Jaiprakash Associates said that it had signed an MoU with UltraTech Cement to sell a total capacity of 22.4 million tonnes per annum (mtpa) across Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Andhra Pradesh and Karnataka.