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Shree cements deal to take Union private
Posted on Friday, 12 January 2018 13:40
Two cement manufacturers are joining forces as Indian firm Shree Cement will buy a 92.8 per cent stake in UAE-based Union Cement for an enterprise value of USD 305.24 million in cash.
The board-approved deal also offers the acquiror the option to buy the remaining 7.2 per cent share.
Headquartered in Kolkata, Shree was founded in 1979 and now has operations in six states across north and east India.
For the three months ending 31st December 2017, it reported comprehensive income of INR 3.38 billion (USD 53.15 million), up 45.9 per cent from the INR 2.32 billion for the same period in 2016.
This transaction marks the company’s first international expansion and will increase the buyer’s cement capacity to 33.30 million tonnes per year.
Completion is slated for October 2018, subject to customary closing conditions, including the target delisting from the Abu Dhabi Securities Exchange and approvals from the relevant regulatory bodies.
Union reported revenue of USD 120.27 million and earnings before income, taxes, depreciation and amortisation (EBITDA) of USD 25.97 million for the nine months ending 30th September 2017.
It has a yearly clinker and cement product capacity of 3.30 and 4.00 million tonnes, respectively, and is touted one of the leading manufacturers of the building material in the UAE.
The country is a growing economy and businesses based there have been targeted in 166 deals announced since January 2017, according to Zephyr, the M&A database published by Bureau van Dijk.
China National Petroleum’s USD 1.77 billion purchase of an 8.0 per cent stake in Abu Dhabi Company for Onshore Oil Operations, which completed in February, was the largest such transaction.
This was followed by the USD 1.10 billion acquisition of Oman-headquartered Gulf Energy and UAE-based NPS Holdings by US blank check company National Energy Services Reunited and Saudi Arabian private equity firm the Olayan Group in November.
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