Building materials provider CRH has bought a stake in India's Sree Jayajothi Cements.

Sree Jayajothi Cements, a unit of the Shriram Group, has a 3.2 million-ton cement plant in the southern Indian state of Andhra Pradesh. Shriram said the deal valued Sree Jayajothi at 14 billion rupees (€175 million).

Last month, The Irish Times reported CRH had been named as a likely suitor for cement manufacturer, along with French company Vicat.

CRH today said its 50:50 joint venture in India, My Home Industries (MHIL), reached an agreement to acquire 100 per cent of the shares of Sree Jayajothi.

The investment will be financed from MHIL’s existing debt capacity and by equity inputs from the joint shareholders (€70 million). CRH’s equity interest will amount to approximately €35 million.

Indian boutique investment bank Mape Advisory advised Shriram Group on the transaction.

Shriram, is a conglomerate with assets of $9 billion, was said to have had talks earlier with investors including Blackstone Group and KKR for selling its stake in the cement business. Blackstone decided not to proceed, leaving CRH and its French rival to fight it it out.

Shares in Shriram were up 9.4 per cent at 47.70 rupees at 10.07am.

CRH entered the Indian market in 2008 with the acquisition of a 50 per cent stake in MHIL, a cement business located in Andhra Pradesh in South India.

Outgoing CRH chief executive Myles Lee indicated at the group’s annual general meeting last May that it intended to increase its focus on emerging economies when it came to making acquisitions.

During the first six months of this year, it completed deals worth a total of €470 million, and earned €185 million from disposals.