The Adani group has completed the acquisition of major cement players Ambuja Cements and ACC, becoming India’s second-largest cement player. The Adani group, through their special purpose vehicle Endeavour Trade and Investment Ltd, completed the acquisition after completing the transaction with Swiss firm Holcim and an open offer, according to a statement released on Friday.
After the transaction, Adani holds 63.15 per cent stake in Ambuja Cements and 56.69 per cent in ACC (of which 50.05 per cent is held through Ambuja Cements).
“The transaction involved the acquisition of Holcim’s stake in Ambuja and ACC along with an open offer in both entities as per Sebi Regulations,” it said. The value of the Holcim stake and open offer consideration for Ambuja Cements and ACC is $6.50 billion, which makes this the largest ever acquisition by Adani, and also India’s largest ever M&A transaction in the infrastructure and materials space, it added.
Gautam Adani said that what makes cement an exciting business is the headroom for growth in India, which exceeds that of every other country well beyond 2050. In May this year, the Adani Group announced that it has clinched a deal to acquire a controlling stake in Holcim Ltd’s businesses in India.
Ambuja Cements and ACC currently have a combined installed production capacity of 67.5 MTPA. The two companies are among the strongest brands in India with immense depth of manufacturing and supply chain infrastructure, represented by their 14 integrated units, 16 grinding units, 79 ready-mix concrete plants and over 78,000 channel partners across India.
“The Board of Ambuja Cements approved an infusion of INR 20,000 cr into Ambuja by way of preferential allotment of warrants. This will equip Ambuja to capture the growth in the market,” it said. Aditya Birla group firm UltraTech leads the cement sector with an installed capacity over 100 MTPA.
Billionaire Gautam Adani in May won the race to acquire Swiss cement major Holcim’s stake in Ambuja Cements and its subsidiary ACC for $10.5 bn (around Rs 81,361 crore), including the open offers. Gautam Adani said the group expects aggressive expansion and plans to double the existing 70 million tonnes per year capacity within the next five years.
The value for the Holcim stake and open offer consideration makes this the largest ever acquisition by Adani, and India’s largest-ever M&A transaction in the infrastructure and materials space.
In April, the world’s largest cement maker Holcim announced its exit from the country. The company through two listed entities ACC and Ambuja has 66 million tonne per annum capacity (MTPA).
The group entered the market 17 years ago and the exit will put its listed arms, Ambuja and ACC, up for sale. Holcim’s exit is part of the group’s ‘strategy 2025’ that aims for sustainable solutions for the building materials sector. The significance of cement in the overall group is already declining compared to ready mix concrete, aggregates, roofing, and green building solutions. “We will reach 30 percent of group net sales in solutions and products…” the company had said last November last year while announcing its new vision.