Birla sells stake in Zuari Cements for Rs 600 cr

The K K Birla Group has sold its 50 per cent stake in Zuari Cements to its joint venture partner Ciments Francais for Rs 600 crore, thereby making an exit from the cement business.

The K K Birla Group has sold its 50 per cent stake in Zuari Cements to its joint venture partner Ciments Francais for Rs 600 crore, thereby making an exit from the cement business.

Birla firm Zuari Industries took the decision to sell its stake to the French cement major in its board meeting held in Delhi today. ‘‘The decision of ZIL to sell its stake in cement business is based on the company business strategy to focus on its core competence in fertilisers and agri-related businesses in India and overseas,’’ the company said.

ZIL’s investment in Zuari Cements, a 50:50 joint venture with Ciments Francais (owned by Italcimenti) formed in 2000, was to the tune of Rs 213.98 crore. Analysts say more Indian promoters will cash out in the years to come as the industry gets consolidated among three major players: the Kumar Birla group, Swiss cement major Holcim and French firm La Farge.

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The Sekhsarias and the Neotias had sold their stake in Gujarat Ambuja Cement to Holcim recently. The Tatas and Raymond had sold their cement units some years ago.

Zuari Cements presently has an installed capacity of 3 million tonnes per annum. The valuation, based on the company’s result as on March 31, captures the current firm trend of cement business in the country and the EBDITA multiple for transaction is amongst the best in recent transaction in the industry, the company claimed.

ZIL expressed confidence that the strategic move would result in enhancing shareholders value by availing domestic and global opportunities in its core businesses.

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