Samruddhi Cement Limited to merge with UltraTech

1st December, 2009

15 November 2009

Samruddhi Cement Limited to merge with UltraTech

Creates 10th Largest Cement Company in the World

Click here for the investor presentation

• Samruddhi shareholders to receive 4 shares of UltraTech for every 7 shares held in Samruddhi
• On completion of merger, Samruddhi shareholders to get direct participation in the largest domestic cement company

The Boards of Directors of UltraTech Cement Limited (UltraTech) and Samruddhi Cement Limited (Samruddhi), a wholly owned subsidiary of Grasim Industries Limited (Grasim), at their meetings held today unanimously approved Samruddhi’s merger with UltraTech. The exchange ratio recommended by the valuers and approved by both boards is 4 (four) equity shares of UltraTech of face value Rs. 10/- each for every 7 (seven) equity shares of Samruddhi of face value Rs. 5/- each. UltraTech will issue 14.95 crore new shares, thereby increasing its equity capital to Rs. 274.20 crore.

The merged entity:
The merger will result in UltraTech emerging as the largest cement company in India and 10th largest in the world. The merged entity will have the following capacities:

= 48.8 million tpa of grey cement across 22 plants
= 504 MW of captive thermal power plants
= 11.7 million cubic metres of Ready Mix Concrete across 68 plants.

UltraTech will become a pan India player with a 20 per cent market share. Additionally, UltraTech will also add to its portfolio the speciality products of white cement and WallCare Putty.

The merger scheme:
According to the proposal approved by both the Boards, the merger is to be undertaken through a Court approved Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956. The appointed date for the merger is 1 July 2010.

The cement business of Grasim is currently under demerger to Samruddhi, and the proposed merger scheme will take effect only upon completion of the demerger and the issuance of shares by Samruddhi to shareholders of Grasim pursuant to the demerger. Upon effectiveness of the Scheme, UltraTech’s expanded equity capital will be held 60.3 per cent by Grasim and 39.7 per cent will be held directly by the other shareholders of UltraTech and Samruddhi.

The proposed Scheme of Amalgamation will be subject to the approvals of the High Court of Bombay and the High Court of Gujarat. The proposal will further be subject to various statutory approvals, including those from the shareholders and lenders / creditors.

The Scheme is likely to be consummated by Q3 CY10.

Commenting on the merger, Mr. Kumar Mangalam Birla, Aditya Birla Group Chairman said: “The merger will achieve the Group’s objective of consolidating its CementBusiness into a single entity, thereby creating a platform that will help in pursuing aggressive growth going forward.”

Mr. Adesh Gupta, Whole Time Director and Chief Financial Officer, Grasim and a Director of Samruddhi said “Upon effectiveness of the merger, Grasim will retain a strategic and controlling interest in UltraTech while providing UltraTech flexibility for future fund raising.”

Mr. K.C. Birla Chief Financial Officer, UltraTech, said “The merger represents an inflexion point for UltraTech. The combined profitability and cash flows of the resultant entity will provide an impetus to our growth and will act as a force multiplier to our efforts of increasing market share. The financial indicators post merger will support UltraTech to maintain its credit rating. We expect UltraTech’s stock to be re-rated on completion of the merger process.”

This Press Release is being jointly released by UltraTech and Samruddhi.

For more information, contact:
Dr. Pragnya Ram
Group Executive President
Corporate Communications & CSR
Aditya Birla Management Corporation Private Limited
Tel: 91-22-6652 5000 / 2499 5000
Fax: 91-22-6652 5741/ 42
Email: pragnya.ram@adityabirla.com