The energy-to-consumer conglomerate Adani (NS: APSE ) Group has entered into a binding agreement with the Swiss cement giant Holcim (SIX: HOLN ) Ltd, to acquire its cement business in India, which will position Adani Group as the second-largest cement company in the country.
This acquisition by Adani is not only the conglomerate’s largest-ever but also India’s largest-ever M&A transaction in the infrastructure and materials space.The deal includes the sale of Holcim’s stakes in cement majors Ambuja Cements (NS: ABUJ ) andACC Ltd (NS: ACC ).
The infrastructure conglomerate Adani Group, valued at Rs 81,400 crore or $10.5 billion.
Holcim held a 63.19% stake in Ambuja Cements and 54.53% in ACC. Further, reports suggest that the Adani Group could use another $3-3.5 billion to buy the shares of public shareholders.
The offer size for Ambuja Cements is Rs 385/share and Rs 2,300 a piece for Ambuja Cements, which is at a premium of about 8-9% over the current price.
On a successful open offer, Adani Group’s holdings in Ambuja and ACC will rise to 89% and 81%, respectively, making it the second-largest cement company in India, having a capacity of producing about 70 MTPA cement.
The global average cement consumption is 525 kg/capita, of which India’s share is only 242 kg/capita, indicating a tremendous growth opportunity in the country.
Adani Group believes to build a uniquely integrated and differentiated business model, which would set it up for significant capacity expansion.
