6 July 2004
Mumbai

Larsen & Toubro Limited (L&T) and Grasim Industries Limited (Grasim) today announced that the implementation process of the demerger of the cement division of L&T has been completed, and Grasim has acquired majority stake in UltraTech CemCo Limited (UltraTech), the demerged cement business of L&T.
The scheme of arrangement for the demerger of the cement business, sanctioned by the Honorable High Court of Bombay, became effective from Friday, 14 May, 2004. Accordingly, the cement business undertaking was transferred to and vested in UltraTech CemCo Limited.

Grasim had made a successful open offer bid for 30 per cent of the equity of UltraTech with a view of taking management control. Concurrently, Grasim acquired 8.5 per cent equity stake of UltraTech from L&T, and Grasim and its associates have sold 14.95 per cent of their holding in the demerged L&T to the L&T Employee Welfare Foundation.

Speaking on the occasion, Mr. A.M. Naik, Chairman & Managing Director, L&T, said " This transaction, one of the biggest in corporate India, has helped to unlock value for its shareholders and position the demerged L&T as a more focused engineering and construction co."

Says Mr. Kumar Mangalam Birla, Chairman, The Aditya Birla Group, "This transaction reflects our commitment to build a leadership position in cement. We believe that it will take about two to three years for UltraTech to provide a competitive return on the aggressive price offered to its shareholders."
The transaction is expected to provide UltraTech an opportunity to leverage synergies with Grasim and strengthen their ability to compete in the Indian and overseas markets.