UltraTech calls off Rs 5,400 cr deal with Jaiprakash for MP units

Deal fails after Bombay HC declines nod, citing changes in the Mines and Minerals Act, 1947

After over a year wait, UltraTech Cement, India's largest cement maker, has called off the Rs 5,400 crore deal with Jaiprakash Associates for acquiring two of latter's plants in Madhya Pradesh. The deal was announced in December, 2014 and was subject to approval from the Bombay High Court.

In a statement to the exchanges, the Aditya Birla group company, said, "The High Court has indicated that based on the recent amendments in the provisions of the Mines and Minerals (Development & Regulation) Act, 1947 preventing transfer of mines granted other than through auction, and in the absence of any clear timelines for any amendment in the Act, the court cannot sanction the Scheme (of arrangement between UltraTech and Jaiprakash). Under the circumstances, it was decided to apply for withdrawal of the Scheme filed before the High Court."

It's a major setback to UltraTech which had plans to reach an overall capacity of 65 million tonnes after this deal. If the deal had gone through, UltraTech Cement could have got a solid footprint in the central region of the country with easy access to eastern parts of India too.

The deal had involved nearly five million tonnes of capacity in two of Jaiprakash's plants -- Bela and Sidhi. Apart from this, these plants would have offered UltraTech a captive power capacity of 180 Mw.

Shares of UltraTech cement closed marginally in the red at Rs 2,775.45 on Friday while those of Jaiprakash's were down 0.9 per cent on the BSE.