UltraTech, Lafarge eye Jaiprakash cement units: report

Aditya Birla Group and France's Lafarge are separately in talks to buy Jaiprakash Associates' cement units in two states, worth up to about $1.6 billion, the Economic Times reported on Friday.

Officials from Lafarge and the Aditya Birla Group-controlled UltraTech Cement Ltd, India's biggest cement producer, have completed preliminary talks and final bids are expected shortly, the newspaper said, citing sources with knowledge of the development.

Jaiprakash has spun off its cement units in the western state of Gujarat and southern state of Andhra Pradesh into a separate company, Jaypee Cement, which has a combined capacity of 9.8 million tonnes, the newspaper said.

 

The business could be worth about Rs 9,000 crore, based on an estimated cost of $160 a tonne for a greenfield plant, it said.

"We are exploring the option of getting a strategic investor into this company to monetise a part of our investment so the parent company can reduce debt," the paper quoted an unnamed official at Jaypee Cement as saying.

Swiss cement maker Holcim , which has stakes in two Indian companies ACC Ltd and Ambuja Cements Ltd , was also believed to be in the race, the paper said.

Officials at Aditya Birla Group and Lafarge declined to comment, it said.

A spokesman for Jaiprakash Associates was not immediately available for comment.