UltraTech Eyes HeidelbergCement as Next Target in Expansion Spree

Aditya Birla group's UltraTech Cement seems to continue with its aggressive expansion through stake purchases and acquisitions as competition in the sector intensifies.

UltraTech Cement is in advanced talks to acquire the Indian arm of Germany's HeidelbergCement, reported MoneyControl. The cement company's top executives recently met with Heidelberg's management.

HeidelbergCement India operates under the brand name of MyCem Cement and is listed on Indian stock exchanges. The firm had reportedly sought interest from potential suitors in October, last year. Even the Adani group was involved in these talks.

HeidelbergCement India has been the result of years of early expansions and acquisition strategies of Germany's Heidelberg Materials Group. It entered the market in 2006 after acquiring a controlling stake in Mysore Cements. The company later formed a joint venture with Indorama Cement but later went on to acquire it completely.

In 2009, Mysore Cements and Indorama Cement were merged and rebranded as HeidelbergCement India. Since then, the firm has expanded its presence in the Indian market with capacity expansion in Central India. Heidelberg owns a 69.39% stake in the India arm.

Also Read: UltraTech to Acquire Minority Stake in Star Cement, Cement War to Intensify Further

Consolidating Indian Cement Industry

Cement businesses in India have been in a frenzy of mergers and acquisitions after the Adani group's aggressive buyout of Ambuja Cement and ACC Ltd in 2022. Since then, other top cement companies have been trying to buy out or tie up with smaller players to gain a better position in the market. As of now, UltraTech Cement leads the pack in terms of sales volume and capacity, followed by Ambuja Cement, Shree Cement, and Dalmia Bharat.

In 2024, UltraTech Cement acquired a 55.49% stake in Chennai-based India Cements, starting with a 22.7% stake in June, followed by an additional 32.72% stake in July. UltraTech later launched an open offer to acquire an additional 26% stake from public shareholders. Moreover, the company has also acquired an 8.69% stake in Star Cement for Rs 851 crore on December 27, marking another strategic expansion in the sector.

Just earlier this week, JK Cement acquired a 60% stake in Saifco Cements at a value of Rs 174 crore.

Last year, JSW Cement stated in its draft documents for the IPO, "Companies have been preferring the inorganic way of expansion over the organic route due to the lengthy gestation period involved in setting up new plants, which can take three to four years."

It noted that the sector has witnessed an unparalleled surge in mergers and acquisitions, resulting in the transfer of 106-108 million tonnes per annum (MTPA) of capacity, of which 95-97 MTPA have been acquired by large players.