Adani Group wins the race to buy Swiss cement giant Holcim’s stake in Ambuja cements and its subsidiary ACC for $10.5 billion (approximately Rs 81,361 crore), including open offers, bringing the port-to-energy conglomerate into the cement industry and it the second largest cement producer in the country.
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Shares of Ambuja Cements and unit ACC rose 2.9 percent and 6.4 percent respectively on Monday, a day after conglomerate Adani Group said it would buy Holcim AG’s controlling stake in the companies. Shares of Adani companies rose 2.75 percent, while rivals UltraTech Cement and Shree Cement fell 2.5 and 1.8 percent, respectively, and were among the biggest losers on the Nifty 50 index.
Currently, the Aditya Birla group, which owns the ultratech cement brand, is India’s largest cement producer. The Aditya Birla Group also rushed to buy out Holcim’s stake after the company announced its exit from India. But the group of Asia’s richest man, Gautam Adani, closed the deal on Sunday and is seen as a major victory for Gautam Adani, chairman of the Adani group.
Holcim owns 63.19 percent in Ambuja Cement and 4.48 percent in ACC ltd. Ambuja Cement in turn owns 50.05 percent in ACC.
Holcim planned to leave India after deciding to focus on the group’s ‘strategy 2025’ which aims to provide sustainable solutions for the building materials sector. But many believe that the intense scrutiny of its operations in India by the Competition Commission of India (CCI), which opened its second investigation against the company in December 2020, could also be one of the reasons why the company was in a rush to relocate. .
The latest development also marks India’s largest outflow of foreign direct investment after Cairn Energy’s exit from India in 2010. The Adani group says the acquisition will propell Adani into the cement business and the deal will vertically establish its new materials, metal and mining industries.
Adani is now India’s second largest cement producer, with a capacity of 70 tons per year. The capacity of the Aditya Birla group is 117 tons per year. The Adani group has a big gap to fill and will most likely be looking to expand further in this sector.
“Our belief in India’s story is unwavering. Combining @Holcim’s cement assets in India with our green energy and logistics will make us the world’s greenest cement company. Jan Jenisch was great to work with. We welcome the teams from @AmbujaCementACL and @ACCLimited,” Adani Group Chairman Gautam Adani said in a tweet following the announcement.
“Our step into the cement industry is another confirmation of our belief in our country’s growth story,” said the Adani Group chairman.
Not only is India expected to remain one of the world’s largest demand-driven economies for decades to come, but India also remains the world’s second-largest cement market, but still has less than half of the global average cement consumption per capita. the population. By comparison, China’s cement consumption is more than seven times that of India,” said Mr Adani.
“When these factors are combined with the various adjacent businesses of our existing business, including the Adani Group’s port and logistics business, the energy business and the real estate business, we believe we will be able to create a uniquely integrated and differentiated business model and set ourselves up ready for significant capacity expansion,” he added.