France-based cement major Vicat SA is holding discussions to acquire 47 per cent equity stake held by its Indian partner Sagar Cements in Vicat Sagar Cement Pvt Ltd in a deal that may value Vicat Sagar at Rs 4,100 crore, according to a report by The Economic Times citing sources.

The stake acquisition, if goes through, is expected to cost the French firm around $120 per tonne of capacity, the paper said. Also, the deal will help Vicat to become one of the top ten cement companies in India and the second-largest in South India after India Cements.

Most recently, Chettinad Cement Corporation Ltd inked a share purchase agreement to acquire up to 61.74 per cent stake in Hyderabad-based Anjani Portland Cement Ltd for Rs 70 crore from the promoters of the company. Besides this, in September last year, another cement major UltraTech had acquired Gujarat unit of Jaypee Cement for Rs 3,800-crore, which cost the company around $124 per tonne of capacity.

Meanwhile, Sagar Cements, in a clarification pertaining to the news article, said that, "We wish to deny the contents relating to our company in the said news item, which are speculative in nature. In this connection, we wish to confirm that we are not aware of any information that has not been announced to the exchanges which could explain the movement in trading."

Vicat Sagar Cement had commenced operations in January 2013 with an initial production capacity of 2.75 million tonnes in Gulbarga in Karnataka. It has plans to augment its capacity at the plant by 5.5 million tonnes in two phases by 2018-19 with each phase costing nearly Rs 1,800 crore.

The Vicat Group has a total capacity of 21 million tonnes and has operations across 11 countries with total revenue of €2.3 billion. The company reported growth of 12.7 per cent in India sales at €155 million in 2013.

Apart from Vicat Sagar Cement, Vicat group holds controlling 51 per cent equity stake in Bharathi Cement, which has a capacity of 5 million tonnes at Kadapa in South India.

The French firm was also looking to buy majority stake in Sree Jayajothi Cements. However, the Indian unit of Irish building materials company CRH bought controlling stake in Sree Jayajothi Cements from Shriram Group for Rs 1,400 crore in August last year.

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