The Adani family announced on Sunday that it had entered into an agreement to acquire a wholesome stake in two of India’s leading cement companies – Ambuja Cements Limited and ACC Limited’s Switzerland-based Holcim Limited – in an offshore special purpose vehicle.
Holcim, through its affiliates, owns 63.19 per cent in Ambuja Cement and 54.53 per cent in ACC (of which 50.05 per cent is through Ambuja Cement). The Holcim stock and open offer consideration value for Ambuja Cements and ACC is $ 10.5 billion, making it Adani’s largest acquisition and India’s largest M&A transaction in terms of infrastructure and materials.
Adani Group Chairman Gautam Adani said, “Our move in the cement business is another legitimacy of our belief in the growth story of our country.”
“India is not expected to be one of the world’s largest demand-driven economies for decades. India continues to be the world’s second largest cement market and still accounts for less than half the global average per capita cement consumption. Statistically, China’s cement consumption is seven times higher than India’s. When these factors are combined with the various engagements of our existing business including Adani Group’s port and logistics business, energy business and real estate. I will be able to set myself up for expansion. “
Adani added: “Holcim’s global leadership in the best practices of cement production and sustainability has brought us some cutting-edge technologies that will help us accelerate our path to more green cement production. Extended with the footprint of renewable power generation, we get a big headstart in the decarbonization journey that is essential for cement production. Will do or pass. “
“I am delighted that Adani Group is acquiring our business in India to lead its next growth era,” said Jan Janish, CEO, Holcim Limited. “Mr. Gautam Adani is a highly respected business leader in India who shares our deepest commitment to sustainability, people and community. I would like to thank our 10,000 Indian colleagues who have been instrumental in developing our business with them over the years. .I am confident that Adani Group is the perfect home for them as well as our customers. “
Consumption of only 242 kg of cement per capita in India, compared to the global average of 525 kg per capita, has significant potential for growth in the cement sector in India. With the post-epidemic recovery in the construction and other infrastructure sectors, rapid urbanization, a growing middle-class and affordable housing tailwind is expected to continue the growth of the cement sector for decades to come.
Ambuja Cements and ACC currently have a combined installed production capacity of 70 MTPA. Both companies are among the most powerful brands in India, with their 23 cement plants, 14 grinding stations, 80 ready-mixed concrete plants and more than 50,000 channel partners, with in-depth production and supply chain infrastructure.
Both Ambuja and ACC will benefit from integration with the integrated Adani infrastructure platform, especially in the areas of raw materials, renewable energy and logistics, where Adani portfolio companies have vast experience and deep expertise. This will enable higher margins and returns on capital invested for the two companies. Companies will also benefit from Adani’s focus on ESG, Circular Economy and Capital Management Philosophy.
Businesses will continue to be deeply connected to the United Nations Sustainable Development Goals, with a clear focus on SDG 6 (clean water and sanitation), SDG 7 (affordable and clean energy), SDG 11 (sustainable cities and communities) and SDG 13 (climate action). .
Acquisition is subject to regulatory approval and conditions.
(With IANS input)