Infra:Holcim’s largest materials contract in India is Adani’s for $10.5 billion

Adani Group has acquired the cement business of Zurich-based Holcim in India for $10.5 billion (approximately Rs 81,000 crore) in India’s largest-ever M&A deal in the field of infrastructure and materials.

Through its subsidiaries, Holcim owns 63.19% of Ambuja Cements Ltd and 54.53% of ACC Ltd (of which 50.05% is owned through Ambuja Cements). This is the largest acquisition ever by Adani, which outstripped JSW and Aditya Birla groups.

Holcim’s exit from India follows several high-profile departures from multinationals, including Ford, General Motors, Harley Davidson, MAN Truck, Hutchison, Etisalat, Fidelity and Citibank, which recently sold its retail business, and some investment banks.

Holcim said the matching offer share prices of Rs 385 for Ambuja Cement and Rs 2,300 for ACC result in cash proceeds of CHF 6.4 billion.

Ambuja Cements and ACC currently have a combined installed production capacity of 70 MTPA. “Both companies are among the strongest brands in India with immense depth of manufacturing and supply chain infrastructure, represented by their 23 cement plants, 14 grinding stations, 80 ready-mix concrete plants and over 50,000 channel partners across India,” Adani said.

With this acquisition, Adani is now the second Indian cement manufacturer after Ultratech Cement of the Aditya Birla group.

Gautam Adani, Chairman of Adani Group, said, “Thanks to Holcim’s global leadership in sustainability, we are acquiring some of the most efficient building materials operations in India, powered by clean technologies like waste recovery systems. heat.

The Adani Group created two cement subsidiaries last year: Adani Cementation Ltd, which planned to set up two cement factories in Dahej in Gujarat and Raigarh in Maharashtra; and Adani Cement Ltd.

“We recognize that the Ambuja and ACC operations are energy intensive and therefore, when combined with our renewable energy generation capabilities, we gain a big head start in the decarbonization journey that is indispensable for the Indian industry,” Adani said.

Shares of Ambuja Cements, which has a market capitalization of Rs 71,244 crore, closed down 3.79% at Rs 358.80 on Friday. ACC closed with a loss of 3.02% at Rs 2,113.70 and a market capitalization of Rs 39,692 crore.

Holcim CEO Jan Jenisch said: “Over the past twelve months, we have invested CHF 5 billion in Solutions & Products as a new growth engine for the business, while continuously pursuing complementary in aggregates and ready-mixed concrete. Holcim is ready to seize new opportunities, in line with our “Strategy 2025 – Accelerating Green Growth”, to become the world leader in innovative and sustainable building solutions. »

Holcim bought Ambuja Cement for $800 million in 2005. ACC was bought by Ambuja in three tranches from the Tata group for Rs 370 per share between 1999 and 2001.

With India’s cement consumption of only 242 kg per capita, compared to a global average of 525 kg per capita, the growth potential of the cement sector in the country is significant.

While India continues to be the world’s second largest cement market, it has less than half of the world’s average per capita cement consumption, Adani said.

“As a statistical comparison, cement consumption in China is more than seven times that of India. When these factors are combined with the many adjacent businesses of our existing businesses, including port and logistics businesses, energy businesses and real estate businesses of the Adani Group, we believe we will be able to build an integrated and differentiated business model. unique and set ourselves up for significant capacity expansion,” Adani said.

Comments are closed.