ADITYA BIRLA GROUP BOUGHTS JAYPEE CEMENT

Presented by:

Nagesh Charugundla

Introduction

In one of the largest domestic M&A deals of recent times, Aditya Birla group company Ultratech Cement would announced the acquisition of Jaypee Cement Corporation's (JCCL) Gujarat unit for Rs 3,800 crore.

Aditya Birla Group UltraTech Cement Limited (BSE: 532538) is

India's biggest cement company and India’s largest exporter of cement clinker based in Mumbai, India.

The company is division of Grasim Industries. It has an annual capacity of 52 million tonnes. UltraTech is India's largest exporter of cement clinker four in India and one in Sri Lanka. Most of the plants have ISO 9001, ISO 14001 and OHSAS 18001 certification.

Jaypee Cements Jaypee group is the 3rd largest cement

producer in the country. The groups cement facilities are located in the Satna Cluster (M.P.), which has one of the highest cement production growth rates in India.

The Group is committed towards the safety and health of employees and the public. Our motto is

“Work For Safe, Healthy, Clean & Green Environment “.

Here are the top ten things about the deal 1. The deal will further cement UltraTech’s numero uno

position in the market and give it an entry into Gujarat. “With this acquisition of 4.8 million tonne capacity, our installed capacity will increase to 59 million tonnes per annum.

2. The Birla takeover is a lifeline for infrastructure major Jaypee Group. Jaypee Cement (JCCL) is a wholly owned subsidiary of Jaiprakash Associates.

3. UltraTech Cement expects savings of nearly Rs 40 core a year from synergies. the company expects to save costs in the medium to long term from this plant.

4. Jaypee Cement had Rs 350 crore of carry forward losses.

5. Jaiprakash Asssociates expects to close the deal in the next 7-9 months after statutory approvals including those from the court and the CCI (Competition Commission of India).

6. The Gujarat operation consists of a 3.6 million tonne clinker plant at Kutch with 2.4 mn tonnes of cement grinding capacity.

7. The Jaypee Group’s cement capacity will come down to 33 million tonnes and it will continue to be the third-largest cement manufacturer in the country after adding into Aditya Birla group.

8. UltraTech will take over the Rs 3,650-crore loan of Jaypee’s Gujarat unit and transfer to it Rs 150 crore worth of shares once the transaction is completed.

9. According to a Kotak report, The valuation is comparable to the $133 per tonne that Ambuja Cements is estimated to be paying for a stake in ACC’s units.

10. The deal would give UltraTech Cement a significant presence in the key western Indian markets as well as access to a jetty that would enable it to ship cement to new markets.

PAYMENT OF ADITYA BIRLA GROUP TO JAYPEE CEMENTS

Aditya Birla Group It bought Jaypee Cement Corporation’s 4.8-million-tonne cement manufacturing unit in Gujarat for an enterprise value of R3,800 crore, without forking out any cash but taking on the latter’s debt of Rs3,650 crore.issuing shares for a value of R150 crore.UltraTech’s capacity climbs to an unassailable 59 mt, bigger than the 57.25 mt.

ADDING STRENGTH TO ADITYA BIRLA GROUPS

VALUE VALUE VALUE VALUE VALUE

2,472.6115 nov’09

779.3120 jan’05

571.8321 may’04

563.5530 jan’06

397.263 May’06

Target samrudterndhi Cement

TargetACC

TargetUlteratech Cement

TargetAmbujaCements

TargetAmbujaCementsEastern

AcquirerUlteratech Cement

AcquirerAmbujaCements

AcquirerGrasimIndustries

AcquirerHolcim

AcquirerAmbujaCements

Profits of Aditya Group(Ultratech Cements+Jaypee cements)

UltraTech Cement, an Aditya Birla Group company, reported that its net profit was down 13% at Rs 673 crore (Rs 778 crore).

The shares of Aditya Birla Group is incresed by 22%.

BIRLA SHOPPING CART2004:Grasim acquires a controlling stake in Ultratech,a cement

company.2007:Hindalco acquires Atlanta-headquartered.$6 the largest aluminum

rolling company.2008:idea celular buys Spice communication from B K Modi for

3,240cr.2010:Ultratech buys a majority stake abd management control in

Dubai-Based Star Cement.2011:Birla group takes over bio-refinery company for $340mn and

birla takes Atlanta-based columbian chemicals for $875mn to become the world’s largest producer for carbon black.

2012:Birla buys terace bay pulp mill in North Westren Ontario for $110mn

2013:Ulteratech buys Jaypee’s Gujarat cement units for 4000cr.

Conclusion:

Aditya Birla Group Mangalam Birla said the transaction would add 5mt to Ultratech’s capacity and give it a significent presence in the weatern Indian Markets.