UltraTech Cement Ltd , part of the Aditya Birla conglomerate, said on Sunday it had agreed to buy Jaiprakash Associates Ltd’s cement plants for an enterprise value of 165 billion rupees ($2.4 billion).
UltraTech, beating competition from domestic and international bidders for the assets, said in a statement it had signed a memorandum of understanding with Jaiprakash to acquire plants whose capacity totalled 22 million tonnes a year.
The agreement will increase India’s biggest cement maker’s installed capacity by one-third to 90.7 million tonnes annually, and provide infrastructure firm Jaiprakash with much-needed relief to pare its debts.
Other companies interested in Jaiprakash’s plants included Irish building materials group CRH and India’s Dalmia Cement, sources told Reuters this month.
Sunday’s announcement did not say how many plants UltraTech would acquire from Jaiprakash.
It was not clear if the agreement covers two plants in central India which UltraTech said on Friday it was scrapping plans to buy. A court had said a deal on those two facilities, first signed in late 2014, could not be allowed under current regulations.
Jaiprakash, which has interests in roads, property and is best-known as the builder of India’s Formula One racing track, has been trying to sell its cement business to reduce debt and placate its banks, in common with many Indian infrastructure businesses.
Credit Suisse said in a note this month that Jaiprakash, which it said had debts of 753 billion rupees at the end of the 2015 financial year, had failed to earn enough to cover its interest payments for 11 consecutive quarters.
UltraTech said the transaction was subject to definitive agreements and regulatory approvals.