French cement maker Vicat is buying 51 per cent equity in Bharathi Cement Company Ltd, promoted by Y S Jagan Mohan Reddy, Member of Parliament and son of the former chief minister of Andhra Pradesh, Y S Rajasekhara Reddy.
Vicat, in a statement on its website, said the acquisition would be financed with debt. It did not mention the deal size. The acquisition would aid Vicat to tap the southern markets, which represent 40 per cent of the total Indian cement market.
Bharathi operates a cement plant of two lines that would reach to a five million tonne capacity by the end of 2010. The cement is sold in Andhra Pradesh, Tamil Nadu, Karnataka, Kerala and Goa.
Vicat had earlier joined hands with Sagar Cements and planned to set up a new cement unit at Gulbarga in Karnataka with a 5.5 mt per annum on two clinker production lines, each with a daily capacity of 6,000 tonnes. The first line of production, with an annual capacity of 2.75 mt, would be commissioned in 2012.
The partnership of Vicat with Jagan Mohan Reddy and Sagar Cements would leverage on operational synergies to emerge as strong cement players in south India. With controlling interest in both the companies, Vicat would be able apply its expertise to enhance production of both the companies, the release said.
Reddy is also promoter of the Sakshi Group that publishes a Telugu daily and owns a television news channel of the same name.
