UltraTech board mulls merger of Grasim Cement

Aditya Birla group company UltraTech today said its board will meet tomorrow to consider a proposal from Samruddhi Cement to merge the cement business of group with itself.

The group, which had acquired UltraTech from engineering giant L&T in 2004, had planned to hive-off Grasim Cement into Samruddhi, a wholly owned subsidiary of Grasim Industries. The demerged entity would be listed and then merged with UltraTech.

In a filing to the Bombay Stock Exchange UltraTech Cement said it "has received a consolidation proposal from Samruddhi Cement Ltd, a wholly owned subsidiary of Grasim Industries ... A meeting of the board of the company has been convened on October 6 to consider the aforesaid proposal."

Last week, Aditya Birla group company Grasim Industries said it would consolidate its cement businesses by merging Grasim Cement with UltraTech, which together will have a capacity of 49 million tonnes per annum or 20 per cent of the country's cement production.

Post-merger (Samruddhi and UltraTech), Grasim's holding in the consolidated entity would be somewhere between 55-65 per cent. Grasim shareholders would hold 35 per cent in Samruddhi post demerger.

Shares of Ultratech today witnessed heavy volatility on the bourses. The stock dipped by 4.55 per cent to an intra-day low of Rs 810.30 after touching a 52-week high of Rs 886.25 in the morning trade on BSE.