L&T Vs Grasim

HOW IT STARTED…
• Increasing stakes of Grasim in L&T
• Announcement of Open Offer
• L&T’s announcement to hive off cement
business.
 STORY BEHIND THE PICTURE…

• Reliance’s failed attempt of

acquiring control of engineering major

• Ambition of Grasim to become no 1
• Surprise move of Grasim to buy 10% stakes
from Reliance
 STRUCURAL DEMERGER
• Strategy Behind Structural Demerger
To bring Grasim’s stakes down to 3.75% in
cement business
No direct threat from Grasim for
engineering and construction business.
Could maintain their independence and
management control.
 VERTICAL DEMERGER
Intentions Behind Vertical Demerger
to acquire majority stakes in cement business
 FINAL DEAL
Sum & substances of L&T demerger:
• L&T to demerge its cement business into new
company
• Grasim to acquire 8.5% equity shares of L&T
• Grasim to make an open offer for 30% equity
stake to acquire management control.
• Grasim to sell its entire holding in L&T’s non
cement business to L&T employee trust
 CEMCO
Before Open offer After Open Offer

Grasim
Others 12%
35% Others
L&T 19%
20% Grasim
FII 51%
FII 18%
33%

L&T
12%
 WHO WON???
It was a ‘WIN-WIN’ situation for both the
business houses.
L&T
Regained stakes in L&T
Lowered Risk for Core
Business of engineering and
construction
Shares were transferred to
L&T employee trust it ensured
share prices will not come
down due to availability of
such a large chunk
GRASIM
Became No 1 in Indian
Cement industry
No Investment in noncore
business
Expected cash inflow of 470
crores from L&T during the
deal
THANK YOU!!!