Cement Industry
Growth of 9% in the last three years has drawn attention of foreign companies to Indian cement companies. The industry’s average PE is down to 7 times currently.
Rising input (coal, fuel and power) costs and regulatory measures to check cement prices have made it difficult for players to make profits even after rising demand. Decline in valuation has also trimmed the enterprise value per tone of the major cement companies, down by an average of 42% since the start of the year.
M&A deals this year
La Farge(France)- acquired Ready mix concrete (RMC) business of L&T.
Holcim(Switzerland)- holds 41% stake in ACC, 36% in Ambuja Cement, plans to invest more in the country.
CRH(Ireland)- acquired My Home Industries. Announced 50% stake in the company(for a consideration of $452 million) increasing its capacity from 3.2 million tonnes to 4.2 million tonnes.
Vicat SA(France)- buyout of 6.6% in Sagar Cement increasing capacity by 2.5 million tonnes per annum.Other companies like Cemex(Mexico), Italicementi(Italy) too plan expansion in the country.
No comments:
Post a Comment