Reliance Infra deals over Cement Business, worth INR 4800 crore

The agreement is subject to formal approval from Competition Commission of India and other regulatory authorities.

Reliance Infrastructure (R-Infra), part of the Anil Ambani-controlled Reliance Group, on Thursday said it was selling its cement business to Kolkata-based Birla Corp, the M P Birla Group firm now controlled by Harsh Lodha, for Rs 4,800 crore. The proposed deal values the cement business at $140 per tonne.

In Madhya Pradesh, Maharashtra, Rajasthan, Karnataka, Andhra Pradesh and Himachal Pradesh, potential expansion will also be improved with mineral concessions in to come forward as a pan-Indian player in the foreseeable future. Birla Corp will also benefit from Reliance Cement’s captive coal mine.

Reliance Cement has an annual capacity of 5.08 million tonnes at its facilities at Maihar in Madhya Pradesh and Kundanganj in Uttar Pradesh, besides a grinding unit of 0.5 million tonnes at Butibori, near Nagpur, in Maharashtra. The company’s capital-intensive plans were shelved as the Reliance Group got saddled with debt.

In a statement, RInfra said, “Under this transaction Birla Corp will acquire the 100% shareholding of RInfra in Reliance Cement Company Pvt Ltd (RCCPL)”.

Birla Corporation Limited has presence across cement and jute, with cement constituting over 90% of its revenues.

The deal comes on a day Lafarge announced its decision to divest its entire capacity of 11mt in the country. Apart from Birla Corp, Blackstone, KKR, Carlye and Baring Private Equity Asia had shown interest.