Ireland based cement major CRH plc has announced that it has terminated negotiations with Jaypee Cements for acquisition of its two assets in Gujarat.
“CRH plc had entered into negotiations with Jaypee Cement Corporation (Jaypee) regarding the possible purchase by CRH of an equity stake in Jaypee’s Gujarat cement business. These negotiations have now been terminated as the parties were unable to agree terms. CRH acknowledges the co-operation of the Jaypee management team throughout the negotiations and due diligence process, ” the company said in a communiqué’ to the stock exchanges.
In early August, CRH had said that it was in talks with buying two Gujarat-based assets of Jaypee Cements, the third largest cement producer in the country by capacity. Read here.
Analysts tracking the space have, however, been sceptical on the deal owing to valuations. Sources had then indicated that the deal would have fetched as much as Rs 4,750 crore ($864 million). Jaypee Cements has been looking to sell off these assets for last 5-6 months but has not been able to clinch a deal.
An international investment bank is understood to be advising Jaypee Cements on the deal. In the past, both Lafarge and Aditya Birla group had undertaken due diligence of the assets, but had backed off due to mismatch in valuation.
The company is among the top three cement makers in the country behind Aditya Birla Group’s Ultratech and Holcim which controls ACC and Ambuja Cement.
(Edited by Prem Udayabhanu)