Stock of Birla Corporation surged over 19 per cent today after the company announced the acquisition of LafargeHolcim's two cement plants in Jharkhand and Chhattisgarh for Rs 5,000 crore.
The stock advanced by 19.27 per cent to settle at Rs 540.25 on the BSE. In intra-day, it skyrocketed 19.99 per cent to Rs 543.50 -- its highest trading permissible limit for the day.
On the NSE, the scrip zoomed 18.9 per cent to Rs 539.25.
The market valuation of the company rose by Rs 673.21 crore to Rs 4,160.21 crore.
Diversified group Birla Corporation said, "It has agreed to a transaction with Lafarge India Pvt Ltd, whereby Birla Corp, either directly or through its wholly-owned subsidiary, shall acquire both the Jojobera and Sonadih cement businesses (Acquisition business) from Lafarge India for an Enterprise Value of Rs 5,000 crore."
LafargeHolcim had to sell the two units after Competition Commission of India (CCI) in April this year approved the merger of Holcim and Lafarge on condition that the latter will divest one cement plant and one grinding station in Eastern India.
The deal will help Birla Corporation expand presence in Eastern India, Jharkhand, Chhattisgarh. It has cement plants in Madhya Pradesh, Uttar Pradesh, Rajasthan and West Bengal.
LafargeHolcim in a statement today said, "It has entered into a letter agreement with Birla Corp subject to approval by the CCI for the divestment of certain of its assets in India as part of the merger of its legacy companies for an enterprise value of Rs 5,000 crore (approx. CHF 750 million).
The proceeds from the sale of the divestment business will be used to further reduce debt.
