JSW Cement, the building-materials division of JSW Group, a prominent steelmaker in India, is said to be in early talks with German cement company Heidelberg Materials to purchase its cement businesses in India, which produce 13.4 million tonnes annually.
Sources within the industry have told the business daily, Economic Times, that JSW Cement began discussions when JSW Group made an unsolicited offer to acquire Heidelberg's local entities, which primarily operate in peninsular India.
Moneycontrol could not independently verify the report.
The building materials industry in India, which is the world's second-largest cement market in terms of capacity and consumption, is highly regional and dependent on freight. In mergers and acquisitions, profitability-linked enterprise valuation multiples are often determined by manufacturing proximity to the end-consumption market.
It has been reported that a second global cement manufacturer may soon be leaving India. This follows Holcim Group's departure in 2022. The Adani Group emerged as the winner in the closely-contested bidding for Ambuja Cements and ACC, which were sold by the Holcim Group. JSW Group was also a participant in the bidding process.
The future of Heidelberg's India exit strategy, however, remains uncertain, as the company may choose to sell its assets through a bidding process, which could lead to more buyers and greater competition for the plants. A spokesperson for Heidelberg Materials declined to comment, while the JSW Group did not respond to an email from ET requesting comments.
JSW Group, under the leadership of Sajjan Jindal, is currently working to turn its cement and ports businesses into profitable ventures, though both have faced delays in the past. While there has been some progress in port operations, the future of the cement subsidiary remains uncertain, according to industry experts.
JSW's cement business had plans for an IPO in the past. According to past media reports, Parth Jindal, the managing director of JSW Cement, had previously mentioned the listing of the cement business in FY20. In a 2019 interview with Business Standard, Parth Jindal expressed his plans to list the business in 2021. However, the business remains unlisted so far. In August of this year, Parth Jindal announced a new listing timeline for FY25.
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