Going forward with its plan to become debt-free, Kolkata-based Emami Group has agreed to sell its cement business, Emami Cement, to Nuvoco Vistas Corp Ltd, a Nirma Group company, for an enterprise value of Rs 5,500 crore. The transaction is expected to be completed in the next 3-4 months subject to customary approvals including that from the Competition Commission of India.
The Indian cement industry is moving towards consolidation. Nuvoco Vistas's acquisition of Emami Cement will be its second acquisition in east India; it had earlier acquired Lafarge India’s cement assets at an enterprise value of $1.4 billion. Emami Cement's acquisition will take Nuvoco's total cement capacity in eastern, northern and western India to 23.5 mtpa, including an ongoing capacity expansion project at its Jojobera plant and over 60 ready-mix plants. Emami Cement operates an integrated cement plant in Risdah, Chhattisgarh; and grinding units in Bihar, West Bengal and Odisha, with a total installed capacity of 8.3 mtpa. It has mining leases in Chhattisgarh, Rajasthan and Andhra Pradesh. The combined operations will span three facilities in Chhattisgarh, two each in Rajasthan and West Bengal and one each in Bihar, Jharkhand, Odisha and Haryana.
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The acquisition of Emami Cement will result in Nuvoco’s cement sales spreading across Chhattisgarh, Odisha, West Bengal, Bihar, Jharkhand, Rajasthan, Madhya Pradesh, Gujarat, NCR region, Punjab, Uttar Pradesh and Haryana.