Indian billionaire Kumar Mangalam Birla is reported to have said he is open to buying overseas cement factories in a deal similar to his US$5.8 billion (€4.65) acquisition of aluminum maker Novelis in 2007.
“We are at some sort of an inflection point, where we are strong in our domestic market and we want to look at investing abroad more aggressively,” Birla said in an interview with Bloombrg News in his office in Mumbai.
“As far as I can see, there’s no Novelis-type of transaction potentially in the cement sector. But, if there was in principle, I’d surely love to do that.”
His Aditya Birla Group, which is engaged in businesses spanning telecommunications, metals to retail, is looking to expand overseas even as a global slowdown, project delays and loss of coal blocks at home derailed its target to boost revenue by 63% to $65 billion by 2016.
Reports say that
Holcim and Lafarge are selling units with an estimated enterprise value of €5 billion euros ($6.2 billion) to €7 billion as they seek anti-trust backing for a planned global cement giant with about $40 billion revenues.
Birla is sais to be selectively bidding for the Brazil and Philippine assets of Holcim and Lafarge, a person familiar with the plans said inOctober, asking not to be identified citing company policy.
Asia Pacific, the Indian Ocean rim and South America are the regions that the company is keen on, said Birla. The company will also look at assets in India, he said.
“It must match our value-creation criteria,” Birla said. “There is no desperation to buy international or Indian assets. In the last ten years we have gone from nowhere on the global map to being No. 7.”
It is reported that he expects the group’s cement capacity rise 61% to 100 million tonnes in a decade.
UltraTech agreed last year to buy Jaiprakash Associates’ cement factory in Gujarat state for an enterprise value of 38 billion rupees ($620 million).
The cement industry globally has always been very active for deals as companies shift their portfolio of businesses between mature and emerging markets, Sonia Baldeira, analyst at Bloomberg Intelligence said in a report.
Birla’s Hindalco Industries, India’s second-biggest maker of aluminum, in 2007 acquired Novelis at a cost six times its profit that year. The buy-out helped Hindalco more than triple sales by March 2008 and enter automotive sheets business in Europe and the US.
