CRH has confirmed it has entered into discussions with India’s Jaypee Cement Corp regarding the purchase of an equity stake in the business in Gujarat province.
Speculation grew last month about the Dublin-headquartered building materials giant holding exploratory talks with Jaypee — India’s third largest cement producer.
Reports on Monday in India’s leading business publication, the Economic Times, suggested CRH is looking to spend around €600m on a 51% stake in the Gujarat business, which consists of two cement plants with a total capacity of 4.8m tonnes.
There is also a grinding plant with the capacity to produce 2.4m tonnes of cement per year.
The latest report indicates that CRH will have an option to increase its stake to 75%, at a pre-determined price, over the next two years. The deal is reported to be close to being finalised.
CRH management has been vocal about plans to boost the group’s presence in emerging markets such as India and China.
CRH said in a statement yesterday that it has entered negotiations “that may lead to the purchase, by CRH, of an equity stake in Jaypee’s Gujarat cement businesses”.
“The completion of any transaction would be subject to satisfactory due diligence, the approval of the respective boards of directors, and the granting of the required regulatory approvals,” it stated.
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