India’s Biggest Open Offer: Adani Group’s Rs 31,000 Cr Open Offer To Buy Stakes In Ambuja Cements, ACC

Adani Group has been greenlit by capital markets regulator SEBI to make a $3.8-billion open offer for Ambuja Cements and ACC after it acquired a 63% stake in Ambuja Cements from Holcim, a Switzerland-based construction company.

India's Biggest Open Offer: Adani Group's Rs 31,000 Cr Open Offer To Buy Stakes In Ambuja Cements, ACC

The transactions

Adani acquired Ambuja Cements and ACC from Holcim for $10.5 billion (approx. Rs 83,000 crore), making the Adani Group India’s second largest cement producer overnight. 

The $10.5 billion transaction includes a $3.8 billion public offer.

This would make Adani Group India’s second largest cement producer overnight.

This totals up to an investment of approximately Rs 31,139 crore, which may constitute the biggest open offer in corporate Indian history.

A Mauritius-based entity owned by the Adani family Endeavour Trade and Investment will invest Rs 19,880 crore to buy 26% or 51.63 crore shares of Ambuja Cements from the public at Rs 385 apiece.

SEBI Rules

Should the open offer be successful Adani’s stake in Ambuja would rise to 89.11% and in ACC to 80.53%.

According to Indian stock market rules, acquiring 25% or more of the shares in a local listed company will trigger a mandatory open offer where minority shareholders can choose to sell their stakes to the new investor at a predetermined price. 

Minority shareholders can choose to sell their stakes to the new investor at a predetermined price. 

Earlier ownership

The open offer price for Ambuja is at 6% discount compared to Thursday’s closing price while that for ACC is at a 1% discount.

ICICI Securities Ltd and Deutsche Bank AG are advising the Adani Group on the open offer

The deal was also cleared by the Competition Commission of India (CCI) last week.

This deal would make Adani Group become India’s second-largest cement producer virtually overnight in what’s an extremely fragmented and competitive market.

Together, Ambuja and ACC have 23 cement plants, 14 grinding stations, 80 ready-mix concrete plants and over 50,000 channel partners across India.

What Adani gains

Holcim agreed to sell its 63% stake in Mumbai-listed Ambuja Cements to Adani Group back in May.

The Adani Group will acquire 63.1 per cent of Ambuja Cements along with related assets. Ambuja’s local subsidiaries include ACC Ltd, which is also publicly traded.

Ambuja Cements and ACC currently have a combined installed production capacity of 70 million tonne per annum. The two companies together have 23 cement plants, 14 grinding stations, 80 ready-mix concrete plants and over 50,000 channel partners across India.

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