Gautam Adani, in his largest ever M&A, has sealed the deal to acquire Holcim’s stake in Ambuja Cements and ACC for $10.5 billion, including the open offer payment. It is also the largest acquisition in India’s Infra and materials sector.
The move gives Adani Group a solid foot in the construction materials market, making it a significant player in India’s cement sector. Striking the deal, Adani said, “Our move into the cement business is another validation of our belief in the nation’s growth story.”
As per Securities and Exchange Board of India’s ( SEBI) norms, Adani will have to buy an additional 26% stake in the two public companies from non-promoter shareholders. It is learned that Adani has offered Rs. 385 for a share of Ambuja Cements and Rs. 2300 per share of ACC.
The combined infrastructure of Ambuja Cements and ACC totals 31 manufacturing sites and 78 ready-mix concrete plants with 10,700 people working in them.
Adani noted, “We are acquiring some of most efficient building materials operations in India, powered with clean technologies like heat recovery systems. We recognize that Ambuja Cements and ACC operations are energy-intensive. Therefore when combined with our renewable power generation capabilities, we gain a big headstart in the decarbonization journey that is a must for cement production.”
The other leading contenders for the deal were JSW and Aditya Birla’s UltraTech cements. However, Adani outbid them with a better offer through an offshore Special Purpose Vehicle (SPV).
India ranks number two in cement manufacturing with an annual capacity of 540 million tonnes. Aditya Birla’s UltraTech is the market leader in the country, with a production capacity of 117 million tonnes. Now, after buying Holcim’s stake in Ambuja Cements and ACC, Adani will become the second leading cement producer in India, with a capacity of 70 million tonnes.
Photographer: Adeel Halim