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Adani to buy Holcim stake in Ambuja Cements and ACC for $10.5 billion

The largest infra and materials deal in the country makes Adani India’s second-largest cement maker with a capacity of about 70 MTPA

May 16, 2022 / 06:21 AM IST
Gautam Adani, Chairman of the Adani Group with Holcim CEO Jan Jenisch (image courtesy - Twitter)

Gautam Adani, Chairman of the Adani Group with Holcim CEO Jan Jenisch (image courtesy - Twitter)

 
 
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The Adani Group said on May 15 that it has entered into definitive agreements to acquire Swiss cement major Holcim Ltd.’s businesses in India - Ambuja Cements and ACC Ltd, in a deal that propels the infrastructure conglomerate helmed by billionaire Gautam Adani as the second-largest cement maker in the country.

The deal, which will take place through an offshore special purpose vehicle, values the Holcim stake and open offer consideration for Ambuja Cements and ACC at about $10.5 billion, making this the largest ever acquisition by Adani, and India’s largest ever M&A transaction in the infrastructure and materials space, according to a company statement.

With this, Adani now becomes India’s second largest cement manufacturer with a capacity of about 70 Metric Tonnes Per Annum (MTPA), the statement added.

Holcim, through its subsidiaries, holds 63.19 percent in Ambuja Cements and 54.53 percent in ACC (of which 50.05 percent is held through Ambuja Cements).

The open offer price per share for Ambuja Cements will be Rs 385 while that of ACC will be at Rs 2,300, according to a stock exchange filing.

Earlier today, Moneycontrol reported citing multiple sources familiar with the situation, that the board of Holcim, the world’s largest cement maker, is likely to soon take a final call on the sale of its India business, in a mega transaction which would mark one of the biggest exits by an MNC in India. Sajjan Jindal-led JSW Group and Aditya Birla Group, which owns India’s largest cement company UltraTech, were also among potential bidders, according to recent media reports.

"Our move into the cement business is yet another validation of our belief in our nation's growth story,” Adani Group’s Chairman Gautam Adani said in the statement. "Not only is India expected to remain one of the world's largest demand-driven economies for several decades, India also continues to be the world's second largest cement market and yet has less than half of the global average per capita cement consumption. In statistical comparison, China’s cement consumption is over 7x that of India’s. When these factors are combined with the several adjacencies of our existing businesses that include the Adani Group's ports and logistics business, energy business, and real estate business, we believe that we will be able to build a uniquely integrated and differentiated business model and set ourselves up for significant capacity expansion.”

Ambuja Cements and ACC are two of the strongest brands recognized across India, the chairman added.

“When augmented with our renewable power generation footprint, we gain a big headstart in the decarbonization journey that is a must for cement production. This combination of all our capabilities makes me confident that we will be able to establish the cleanest and most sustainable cement manufacturing processes that will meet or exceed global benchmarks,” he said.

The acquisition, which is subject to regulatory approvals and conditions, is expected to close by the second half of 2022.
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