UltraTech Cement Seeks Larger Slice of UAE's RAK White Cement

Indian cement giant UltraTech Cement, part of the Aditya Birla Group, has made a play for a bigger share of RAK White Cement, a company listed on the Abu Dhabi stock exchange. The move signals UltraTech's ambition to expand its presence in the white cement market, a key segment in the construction industry.

UltraTech, through its wholly-owned subsidiary UltraTech Cement Middle East Investments Ltd (UCMEIL), announced a partial cash offer to acquire an additional 31. 6% stake in RAK White Cement. This comes just over a month after UCMEIL acquired a 29. 39% stake in the UAE-based company for $101. 1 million.

The new offer, if successful, would bring UltraTech's total ownership in RAK White Cement to 61%. The offer period will be open from May 28 to June 24, 2024, and the acquisition is expected to be finalized within 90 days from the offer date.

Analysts believe the acquisition is a strategic move by UltraTech to tap into the growing demand for white cement in the Middle East and North Africa (MENA) region. White cement, known for its aesthetic appeal and superior durability, is increasingly being used in precast concrete applications, architectural designs, and high-end construction projects.

RAK White Cement, with a production capacity of around 700, 000 tonnes per year, is a well-established player in the regional market. By combining its expertise with UltraTech's extensive experience in white cement production (UltraTech has a combined capacity of 120 million tonnes per annum of grey cement), the deal has the potential to create a stronger market leader.

The acquisition is also expected to benefit RAK White Cement by leveraging UltraTech's distribution network and technical know-how. This could help RAK White Cement expand its reach and product offerings, both within the UAE and beyond.

The news of the acquisition proposal has been met with a positive response from investors. UltraTech's share price rose on the Bombay Stock Exchange following the announcement. The deal is still subject to regulatory approvals and acceptance by RAK White Cement's shareholders.

If successful, this acquisition would mark a significant step for UltraTech Cement in its international expansion plans. It would solidify the company's position as a major player in the global white cement market and provide a platform for further growth in the promising MENA region.

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