India’s UltraTech Cement targets majority stake in ARM
Indian based-UltraTech is said to be negotiating with ARM for the controlling stake in Kenya’s second-largest cement manufacturer after French-owned Bamburi Cement.
ARM revealed that the impending transaction which is expected to be complete by March, but did not reveal the identity of the potential investor.
ARM chief executive Pradeep Paunrana, however, declined to comment on the issue, or confirm that the company is in talks with the Indian giant.
UltraTech Cement is the largest producer of grey cement, readymix concrete and white cement in India and is also one of the leading manufacturers of the commodities globally.
It has an installed capacity of 67.7 million tonnes per annum of grey cement, with 12 integrated plants and 18 grinding units.
Its operations span India, UAE, Bahrain, Bangladesh and Sri Lanka and South Africa. The multinational made a net profit of Sh30.8 billion in the year ended March 2015 on gross revenues of Sh393.5 billion.
UltraTech’s potential entry in Kenya marks increased interest in the local highly competitive cement market that has seen the establishment of several new players over the past few years, including Savannah Cement.
Nigeria’s Dangote Cement has also announced plans to enter the local market in the near future, setting the stage for increased competition against established players like Bamburi Cement which is majority owned by LafargeHolcim.
For ARM, raising the funds from the intended sale of preference shares will ease the pressure of mounting debts that has weighed down its earnings.