The M.P. Birla Group said that it is acquiring the cement business of Lafarge India for Rs 5,000 crore through a combination of internal accruals and fresh debt to add another 5.5 million tonnes in annual capacity.

Birla Corporation on Monday announced that it will acquire two cement units from Lafarge India having a capacity of 5.15 million tonnes per annum for Rs 5,000 crore.

Birla Corporation said in a BSE filing said “it has agreed to a transaction with Lafarge India Private Ltd, whereby Birla Corp, either directly or through its wholly-owned subsidiary, shall acquire both the Jojobera and Sonadih cement businesses (Acquisition business) from Lafarge India for an Enterprise Value of Rs 5,000 crore”.

Birla said it will acquire the cement business, comprising an integrated cement unit at Sonadih (Chhattisgarh), a cement grinding unit at Jojobera (Jharkhand), along with Concreto and PSC brands.

“Acquisition business has a cement capacity of 5.15 million tonnes per annum,” it added.

The company said that upon completion of this transaction, Birla Corporation will consolidate its position in the eastern India cement market, where the demand supply scenario and outlook continue to remain buoyant.

Commenting on the transaction, Birla Corp Chairman Harsh Lodha said: “The acquisition Business together with the Concreto and PSC brands, perfectly fit into our strategic vision and ambition of enhancing our competitiveness in our chosen markets.”

The company said the transaction will be funded through exiting cash reserves and incremental debt, and is subject to approval of Competition Commission of India and other regulatory approvals.

KRISCORE Financial Advisors and SBI Capital Markets Ltd were financial advisors and Nishith Desai Associates acted as counsel to Birla Corp for this transaction.

Shares of Birla Corp were trading at Rs 520.60 apiece, up 14.94 per cent from their previous close on BSE.