Dalmia Bharat to acquire cement assets of Jaypee Group at an enterprise value of ₹5, 666 crore

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Dalmia Bharat Ltd. on Monday announced the acquisition of the cement assets of Jaypee Group’s flagship company Jaiprakash Associates Ltd. and its associate firms at an enterprise value of ₹5,666 crore.

In a regulatory filing, Dalmia Bharat informed that its wholly owned subsidiary Dalmia Cement Bharat Limited (DCBL) has entered into a “binding framework agreement for the acquisition of clinker, cement and power plants from Jaiprakash Associates Limited and its associate company.”

The deal includes a total cement capacity of 9.4 million tonnes (MT) per annum, along with clinker capacity of 6.7 MT and thermal power plants of 280 MW at an enterprise value of ₹5,666 crore, it added.

“These assets are situated in the states of Madhya Pradesh, Uttar Pradesh and Chhattisgarh,” said Dalmia Bharat.

The acquisition will help Dalmia to expand its footprint into the central region, it added.

Besides, it will also “represent a significant step towards realisation of its vision to emerge as a pan-India cement company with a capacity of 75 MT by FY27 and 110-130 MT by FY31,” it added.

The transaction is subject to due diligence, requisite approvals from lenders/JV partner of Jaiprakash Associates Limited and regulatory authorities, it added.

Jaypee Power Ventures had last week informed that it will hold a board meeting on Monday to consider a proposal to divest its Nigrie cement grinding plant in Madhya Pradesh.

Separately, Jaypee Group flagship firm Jaiprakash Associates informed that a board meeting had been convened on Monday to apprise the board of the recommendations of the audit committee and the progress on the various divestment initiatives.

Jaiprakash Associates Ltd. (JAL) presently has an aggregate capacity of about 6 million tonnes per annum (MTPA) and Jaiprakash Power Ventures Ltd. has around 4 MTPA.

In October, Jaiprakash Associates and Jaiprakash Power Ventures had announced plans to divest their cement business as well as some non-core assets to reduce debt.