holcim: Adani to acquire assets of Holcim India for $10.5 billion – Times of India

holcim: Adani to acquire assets of Holcim India for $10.5 billion – Times of India

holcim: Adani to acquire assets of Holcim India for $10.5 billion - Times of India

NEW DELHI (Reuters) – The group of Asia’s richest man, Gautam Adani, said on Sunday it had reached an agreement to acquire a majority stake in Holcim Ltd’s India business for $10.5 billion, marking the entry of the energy ports conglomerate into the cement sector. Adani Group will acquire 63.1% of Ambuja Cements Ltd together with related assets. Ambuja’s local subsidiaries include ACC Ltd, which is also listed on the stock exchange.
“The Adani family, through an offshore special purpose vehicle, announced that it has entered into definitive agreements to acquire the entire stake of Switzerland-based Holcim Ltd in two of the main Indian cement companies – Ambuja Cements Ltd and ACC Ltd,” the group said. in a report.
Holcim, through its subsidiaries, owns 63.19% of Ambuja Cements and 54.53% of ACC (of which 50.05% is owned by Ambuja Cements).

“The value of Holcim’s stake and open offer for Ambuja Cements and ACC is $10.5 billion, making it Adani’s largest acquisition ever and largest M&A transaction never before achieved by India in the field of infrastructure and materials,” the statement read. .
In a statement, Holcim said: “The matching offer price of Rs 385 for Ambuja Cement and Rs 2,300 for ACC results in cash proceeds of CHF (Swiss Franc) 6.4 billion for Holcim. ”
Over the past two years, Adani has diversified beyond its core business of operating ports, power plants and coal mines into airports, data centers and clean energy.
The group created two cement subsidiaries last year – Adani Cementation Ltd which planned to create two cement factories in Dahej in Gujarat and Raigarh in Maharashtra; and Adani Cement Ltd.

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Last month, the world’s largest cement maker, Holcim, announced its exit from the country after a long struggle here. The company, through two publicly traded entities, ACC and Ambuja, has a capacity of 66 million tonnes per annum (MTPA).
Holcim was in talks with several companies, including Aditya Birla Group, which owns major cement players UltraTech and energy steel conglomerate JSW Group.
The group, which entered the market 17 years ago, holds a 63.19% stake in Ambuja and 4.48% in ACC, while Ambuja holds a 50.05% stake in ACC.
ACC has 17 cement manufacturing units, 9 captive power plants and 6,643 employees as well as a distribution network of 56,000 dealers and retailers and a national network.
Ambuja Cements has a cement capacity of 31 million tons with 6 integrated cement manufacturing plants and 8 cement grinding units across the country.
In 2015, Holcim merged with French Lafarge to create LafargeHolcim. In June 2016, Ambuja purchased Holcim India’s 24% stake in ACC, making the latter the subsidiary of Ambuja with a 50.05% stake.
The exit of Holcim is part of the group’s “2025 strategy” which aims for sustainable solutions for the building materials sector. The importance of cement across the group is already declining compared to ready-mixed concrete, aggregates, roofing and green building solutions.
UltraTech Cement, with a consolidated capacity of 119.95 million tonnes per annum (MTPA) of gray cement, is a segment leader.
“Our entry into the cement business is further evidence of our confidence in our country’s growth story,” said Gautam Adani, Chairman of Adani Group. “Not only is India expected to remain one of the world’s largest demand-driven economies for several decades, but India also continues to be the world’s second largest market for cement and yet it has less than half the world average consumption of cement per capita.”
In statistical comparison, China’s cement consumption is more than 7 times that of India. “When these factors are combined with the many adjacencies 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 a single integrated and differentiated business model and to set ready for significant capacity expansion,” said Adani, who recently overtook Mukesh Ambani as the richest man in the country.
Adani added that Holcim’s global leadership in cement production and sustainability best practices brings us some of the cutting-edge technologies that will enable his group to accelerate the path to greener cement production.
“Additionally, Ambuja Cements and ACC are two of the strongest recognized brands across India. When complemented by our renewable energy generation footprint, we gain a big head start on the decarbonization journey that is essential for cement production. This combination of all of our capabilities gives me confidence that we will be able to establish the cleanest and most sustainable cement manufacturing processes that will meet or exceed global standards. »
“I am delighted that the Adani Group is acquiring our business in India to lead its next era of growth,” said Jan Jenisch, CEO of Holcim Limited.
“Gautam Adani is a highly recognized business leader in India who shares our deep commitment to sustainability, people and communities. over the years with their tireless dedication and expertise, I am confident that Adani Group is the perfect home for them and our customers to continue to thrive.
With India’s cement consumption of only 242 kg per capita, compared to the global average of 525 kg per capita, the growth potential of the cement sector in the country is significant. Tailwinds from rapid urbanization, growing middle class and affordable housing, as well as post-pandemic recovery in construction and other infrastructure sectors are expected to continue to drive growth in the cement sector over the coming years. next decades.
Ambuja Cements and ACC currently have a combined installed production capacity of 70 million tonnes per year. The two companies together have 23 cement plants, 14 grinding stations, 80 ready-mix plants and over 50,000 distribution partners across India.
“Ambuja and ACC will benefit from synergies with the Adani integrated infrastructure platform, particularly in the areas of commodities, renewable energy and logistics, where Adani portfolio companies have extensive experience and expertise. thorough. This will allow for higher margins and return on capital employed. for both companies. Companies will also benefit from Adani’s focus on ESG, circular economy and capital management philosophy,” the statement added.

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