Indian giant to buy majority stake in UAE's Union Cement for $305m
Shree Cement announced that it would acquire at least 92.83% of Union Cement's equity in a transaction that would take nine months to complete
Shree Cement, a listed Indian manufacturer of cement, announced that it would buy a majority stake in the UAE's Union Cement.
The transaction, expected to be completed within nine months of commencement, will see the Indian cement giant acquire equity worth at least 92.83% of the UAE company.
A total (100%) equity stake acquisition in Union Cement is expected to cost $305.24m (AED1.12bn).
Final payments to Union Cement will be made based on the total value, in proportion to the actual equity shareholding transferred on completion.
Union Cement has agreed to allocate net working capital worth $59.37m (AED218m) on the completion date of the transaction.
The acquisition is subject to Union Cement's conversion from a public joint stock company into a private outfit, as well as its delisting from Abu Dhabi Securities Exchange (ADX).
In 2016, Union Cement posted consolidated revenues worth $153.42m (AED563.5m), and corresponding figures for the first nine months of 2017 were $120m (AED440.7m).
Following the acquisition, which will mark Shree Cement's first business interest outside India, the manufacturer's aggregate capacity will increase from 29.3 million tonnes per annum (MTPA) to 33.3 MTPA.
In a statement to the Mumbai bourse, Shree Cement the UAE, "one of the major economies in the Middle East", showed "good long-term prospects in the housing, construction, and infrastructure segment".