CRH, an Irish building materials company, bought a 50 per cent stake in the Hyderabad-based cement manufacturer My Home Industries (MHIL) for Rs 1,875 crore.
The Irish company paid about $235, or Rs 9,414 a tonne, according to a Kotak Mahindra Bank executive who advised on the transaction. It had earlier rejected bids valuing its cement operations below $200 a tonne.
MHIL has a production cement capacity of 3.2 million tonnes and plans to expand this to 4.2 million tonnes by 2009.
Industry analysts said the sale price is higher compared to the prevailing market valuation of $150 a tonne for a cement plant in India. Holcim, the world's largest cement maker, paid $200 a tonne for buying Ambuja Cements in 2005, while Cimpor paid $162 a tonne for Shree Digvijay Cement in 2007.
Samba Shiva, director finance and commercial, MHIL, confirmed the sale, but declined to give further details.
CRH's business covers the value chain from primary materials including cement, ready mixed concrete, aggregates, lime and asphalt, through manufactured products to distribution. The company had a turnover of ¤18 billion in 2007.
The Rs 1,480 crore deal between French cement maker Lafarge and engineering and construction giant Larsen & Toubro, for the buyout of the latter's ready-mix concrete business, was also considered as expensive.
With the 189 million tonne domestic cement industry set to face a glut in a year and a half, the overseas companies are focusing on long-term business plans in India, stretching up to 20 years from now.
Source: MSN