Mergers & Acquisitions

Shree Cement withdraws from the race to acquire Sanghi Cement

21 July, 2023



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Shree Cement has opted to step back from the competition to acquire a 40-70 percent stake in Sanghi Cement, valued at Rs 6,000 crore

{reg}The decision is driven by Shree Cement's focus on its own expansion plans, with Prashant Bangur, the vice chairman, stating that their short-term priority lies in internal growth. The enterprise value for Sanghi Cement includes a debt of Rs 1,800 crore, and Shree Cement would have had to pay around Rs 1,680-3,024 crore for the stake, primarily from the promoters.
Sanghi Cement operates in the western markets of Gujarat, Rajasthan, Maharashtra, and Madhya Pradesh, with a production capacity of 6.1 MTPA and a captive power plant of 143 MW capacity. Sanghi Industries, which owns Sanghi Cement, posted a net loss of Rs 325.70 crore for FY23 on revenues of Rs 928.36 crore.

Currently, the promoters hold a 72.72 percent stake, and nearly 99 percent of their shares have been pledged. Other companies like UltraTech, Dalmia Bharat, JK Organisation, Nirma Group, and JSW Cement were reportedly interested in bidding for the stake, although a spokesperson from JSW Cement has denied being in talks for the acquisition.{/reg

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