May 21, 2018 / 4:20 AM / a year ago

BUZZ-India's UltraTech Cement rises on deal to buy Century Textiles' cement business

** Shares in UltraTech Cement Ltd rise as much as 4.2 pct to 4,019 rupees; post biggest intraday pct gain since April 19

** Century Textiles and Industries on Sunday here approved the demerger of its cement business into UltraTech in an all-stock deal

** Shareholders of Century Textiles will get one share of UltraTech for every eight shares held; UltraTech will absorb debt of around 30 bln rupees ($440.46 mln)

** Analysts at Macquarie say UltraTech’s capacity would increase by 14 Pct to 110 mln tonnes with this acquisition and extend its leadership in West, Central and East

** Macquarie maintains “outperform” rating

** While trailing earnings suggest 4-5 pct EPS dilution for UltraTech, an increase in efficiency and brand premium should make the deal EPS accretive - Macquarie

** Acquired assets are close to existing assets of UltraTech and so do not offer a new market to UltraTech, Credit Suisse analysts write, keeping “underperform” rating

** However, synergies exist from higher pricing of UltraTech brand, procurement benefit from higher economies of scale and logistical advantages by redistributing Century output - Credit Suisse

** Shares in Century Textiles plunge as much as 8.6 pct to 975.05 rupees, their lowest since March 15, 2017

$1 = 68.1100 Indian rupees

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below