UltraTech Cement in talks to acquire Heidelberg Cements India Ltd

Aditya Birla Group company UltraTech Cement, the country’s biggest cement manufacturer, is reported to be in talks to acquire Heidelberg Cement India Ltd, the India-listed business of German building materials company, Heidelberg Materials.

Heidelberg Materials Group started operations in India in early 2006 with the acquisition of a controlling stake in Mysore Cements. It also formed a joint venture with Indorama Cement and later took control with full acquisition of the business by 2008.

Heidelberg then merged the two companies in 2009 to form Heidelberg Cement India Ltd. Simultaneously, the company expanded further through fresh acquisitions, taking its annual cement capacity from 2.1 million tonnes to 5.4 mtpa.

Heidelberg currently owns four integrated cement plants and a terminal in India, with total installed capacity of about 14 mtpa.

Heidelberg owns 69.39 per cent stake in Heidelberg Cements India Ltd, which is worth around Rs3,381 crore, based on the stock’s closing price on Friday.

Aditya Birla group executives are reported to have recently discussed the proposal with apex management of the German cement maker.

Besides UltraTech, other cement makers such as the Adani Group and JSW Cement are also reported to be in talks to acquire Heidelberg’s cement business in India.

Business consolidation in the cement industry started with the Adani Group’s $6.6-billion acquisition of Ambuja Cements and ACC Limited in 2022 from Lafarge-Holcim.

This was followed by UltraTech’s acquisition of a 55.49 percent stake in Chennai-based India Cements. Earlier this month, the company launched an open offer to acquire an additional 26 per cent in India Cements.

And, in December last year, UltraTech also acquired an 8.69 per cent stake in Star Cement.

The Aditya Birla Group is planning to expand its cement production capacity from around 150 million tonnes at present to 200 million tonnes over the next 10 years.

Aditya Birla Group flagship cement unit UltraTech Cement has a consolidated production capacity of 156.06 million tonnes of grey cement.

Adani Group's cement arm, Ambuja Cement, is also poised for robust growth. The company has set an ambitious goal of reaching 140 million tonnes per annum by 2028.