Adani Group becomes the 2nd largest cement maker in India after Holcim deal
Billionaire Gautam Adani inked a $10.5 billion deal that gives his company a 63.19 per cent stake in Swiss cement major Holcim Ltd’s India operations, Ambuja Cements Ltd, and its subsidiary ACC. With this, Adani Group became the second-largest cement producer in the country after Aditya Birla Group-owned UltraTech Cement, the company said in a statement. JSW Group was also in the race to take over the Ambuja-ACC alliance.
Adani Group
Multinational conglomerate company
- Headquarters: Ahmedabad
- Founder: Gautam Adani
- Founded: 1988
- Number of employees: 23,000+ (2021)
- Subsidiaries: Adani Power, Adani Wilmar, Adani Ports & SEZ, MORE
- Parent organizations: Adani Ports & SEZ, S.B. Adani Family Trust
Adani group has expanded beyond its primary business of operating ports, power plants, and coal mines in \ recent years to include airports, data centres, and clean energy. Last year, the group formed two cement subsidiaries: Adani Cementation Ltd, which planned to build two cement plants in Gujarat and Maharashtra, and Adani Cement Ltd.
Holcim owns 63.19 per cent of Ambuja Cements and 54.53 per cent of ACC through its subsidiaries (of which 50.05 per cent is held through Ambuja Cements). According to the Adani Group, the value of the Holcim stake and open offer consideration for Ambuja Cements and ACC at $10.5 billion, making it India’s largest M&A transaction in the infrastructure and materials space.
Holcim expects to get 6.4 billion Swiss francs ($6.4 billion) of cash proceeds from the sale. The Adani Group said that it would make an open offer to buy more shares. The deal should be completed in the second half of 2022. Ambuja and ACC have a combined capacity to produce at least 70 million tonnes of cement annually, while UltraTech Cement has a capacity of 120 million tonnes. Ambuja and ACC have 31 cement-making facilities and employ over 10,700 people.
According to the Economic Times, Asia’s richest man, Gautam Adani, aims to fund the acquisition through an offshore special purpose vehicle owned by the Adani family. The transaction is the second-largest in India this year, which was clinched after a fierce bidding war with the JSW Group and industry leader Ultratech Cement Ltd. Holcim expects the deal to finalize in the second half of 2022.
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