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UltraTech Cement on Sunday announced it will acquire a majority stake in India Cements, the country's largest cement maker, at a steep premium of $120.76 per tonne. 

The Board of Directors of UltraTech approved the purchase of a 32.72 per cent equity stake of the promoters and their associates in India Cements Ltd, subject to regulatory approvals.

UltraTech will pay Rs 3,954 crore at Rs 390 share for buying a 32.72 per cent stake in India Cements.

Kumar Mangalam Birla, Chairman, Aditya Birla Group, said that UltraTech Cement's investments over the years, both organic and inorganic, have been designed to propel India to become a building solutions champion globally.

"Every investment in a core sector like cement accelerates economic activity and drives progress. These investments have also facilitated India's nationwide infrastructure upgrade, powering our country’s growing need for housing, roads, and other vital infrastructure," Birla said in a statement.

UltraTech made a financial investment in India Cements to acquire 22.77 per cent equity at a price of Rs 268 per share in June this year.

After the financial investment, the promoter group approached UltraTech as they wanted to sell their holding in the company, and "we found it appropriate to acquire their stake in the company".

India Cements has a total capacity of 14.45 million tonnes per annum (MTPA) of grey cement.

Of this, 12.95 MTPA is in the south (particularly Tamil Nadu) and 1.5 MTPA is in Rajasthan.

"The India Cements opportunity is an exciting one as it enables UltraTech to serve the Southern markets more effectively and also accelerates our path to 200+ MTPA capacity," said Birla.