Nirma to acquire Emami Cement in Rs5,500-cr deal
07 Feb 2020
1
Nirma Group has agreed to acquire the cement business of Kolkota-based diversified conglomerate Emami Group for an enterprise value of Rs5,500 crore (about $770 million).
Ahmedabad-based Nirma has signed a binding agreement to acquire Emami Cement Ltd through group company Nuvoco Vistas Corporation Ltd.
“This transaction is an important step in our group’s stated objective of becoming debt-free and with this transaction we will substantially achieve this objective,” Manish Goenka, director at Emami Group, said in a statement.
ECL’s integrated cement plant in Chhattisgarh with two split grinding units in West Bengal and Odisha has a total cement production capacity of around 8.3 million tons per annum. The state-of-the-art integrated cement plant at Risda, Baloda Bazaar, is situated 70 km away from Raipur in Chhattisgarh. A technologically advanced cement grinding unit, successfully commenced production at Panagarh, which is 150 km away from Kolkata. This plant was commissioned during February 2017 with an installed capacity of 2 million tonnes per annum. The company is now in an advanced stage of completing construction for yet another ultra-modern cement grinding plant at Jajpur near Cuttack in Odisha, which once commissioned will take the combined capacity of ECL to 8.3 million tons per annum.
Nirma operates a cement capacity of 14 million tonnes, mainly acquired from LafargeHolcim in 2016 for $1.4 billion. The addition of Emami’s cement business, Nirma will have a total installed capacity of over 22 million tonnes per annum.
The transaction is subject to customary approvals including from the Competition Commission of India (CCI) and is expected to be consummated in the next three to four months.
Nirma won the bid against stiff competition from cement majors such as UltraTech, Star Cement and Ambuja Cements.
Nirma, best known for making soaps and detergents, though it also makes industrial goods such as soda ash, cement and packaging products. Founded by Karsanbhai Patel, Nirma has 12 manufacturing facilities in India and the US.
Law firm Khaitan & Co advised Nuvoco Vistas and Nirma group on the transaction.
