India’s top conglomerate Adani Group announced entering into definitive agreements with the Swiss cement major Holcim Ltd on Sunday, for acquiring the company’s businesses in India.
The Swiss major Holcim Ltd is the world’s largest cement maker and holds a 63.19% stake in Ambuja Cements and 54.53% stake in ACC. Further in ACC, a 50.05% stake is held by Ambuja Cements.
Here’s everything you need to know about the Adani-Holcim deal.
Largest M&A Deal in Indian Infrastructure Segment
Adani Group has forayed into the cements segment in the country, and has signed definitive agreements with Holcim Ltd to acquire its holdings in Ambuja Cements and ACC Ltd.
The consideration for the acquisition deal and open offer for Ambuja and ACC are estimated at about $10.5 billion.
A transaction of this size will make the Holcim deal the largest-ever acquisition by the conglomerate Adani Group. Not just that, it will also be the country’s largest ever M&A transaction in the infrastructure and materials space, stated the company.
As per a stock exchange filing, the open offer price for Ambuja has been set at Rs 325/share and Rs 2,300/share for ACC Ltd.
Moreover, post this deal, Adani Group will become India’s second largest cember maker, after Ultratech Cements.
Adani Group Cement Capacity and Mmgt Views on Holcim Deal
With the deal finalized, Adani’s total production capacity will stand at 70 Metric Tonnes Per Annum.
According to a Moneycontrol report, Holcim’s board is expected to soon take a final call on the sale of its India business, marking an exit for the company from India.
Reports suggest that JSW Group and Aditya Birla Group, which owns UltraTech Cement, were also among potential bidders for Holcim’s Indian businesses.
Commenting on the finalized deal, Gautam Adani, the Chairman of Adani Group said, “Our move into the cement business is yet another validation of our belief in our nation’s growth story.
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.”
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