Dalmia Bharat signs pact with KKR

Dalmia Bharat Ltd said that it has inked a definitive agreement with KKR, under which DBL will acquire KKR’s stake in Dalmia Cement Bharat Ltd. (DCBL) and concurrently bring in KKR as DBL’s largest institutional shareholder with 8.5 per cent holding. The transaction will simplify DCBL’s shareholder structure with DCBL becoming a 100% subsidiary of DBL, the company said in a filing to the Bombay Stock Exchange. DBL will make a preferential issue of 7.5 million equity shares to KKR at INR 825/share and pay KKR a cash consideration of INR 600 crore (USD 89 million) to acquire KKR’s ~15% stake in DCBL. Commenting on the development, Sanjay Nayar, Chief Executive Officer of KKR India, said “We are proud of our association with Dalmia Bharat and continue to believe in its long-term growth. Dalmia team has executed greenfield projects and integrated its acquisitions successfully. We believe that the Indian macroeconomic growth and infrastructure story is poised for a significant uptick in the coming years and the consolidation in cement industry is likely to happen. Given our confidence in Dalmia’s strategy & execution capabilities and corporate governance, we will continue to back Dalmia Cement’s growth and will leverage KKR’s global platform to support the company’s vision of being a leader in the Cement sector.” The transaction is subject to regulatory approvals and other customary closing conditions. Meanwhile, shares of the company closed trading at Rs 780.70 apiece, down 0.93 per cent from the previous close on BSE.