UltraTech Cement is looking to purchase its partner’s stake in Star Cement to take full control of the Dubai-based cement producer, sources familiar with the deal have said, adding to the rumour mill that other UAE producers are ripe acquistion targets.
"The group has an option to purchase the local partner's stake when they bought the majority control company from Dubai-based ETA Star Group," the Financial Express quoted a source as saying.
However, OP Puranmalka, director of UltraTech, commented: "We have an 80 per cent stake in Star Cement. It is not our intent to raise it any further in the immediate future."
UltraTech, India’s leading cement producer which is also part of the Aditya Birla Group, purchased the controlling stake in UltraTech in September 2010 with the remaining stake held by ETA.
UAE cement manufacturers are said to be likely acquisition targets as cement prices and demand continue to decline in the region. Until recently, the UAE industry was primarily owned by local investors but a number of acquisitions since 2007 has seen globals enter the market such as Lafarge, Cemex and Holcim. Recent reports suggest that further UAE cement manufacturers could be put up for sale, and certainly some of the more financially-vulnerable player could now be seen as viable acquisition targets.
