The Adani group, which has a market cap of over $225 billion, is reportedly in advanced talks with Holcim to acquire its India business with Ambuja Cements and ACC. According to a Bloomberg report, Gautam Adani could acquire a controlling stake in Ambuja Cements from the Swiss building materials giant in the coming days.
Shares of Ambuja Cements rose on the news and it settled at Rs 385.15 — a gain of 2.27 per cent on the BSE on Tuesday.
Holcim holds 63.19 per cent in Ambuja Cements. If the Adani group acquires this stake, it will get control over ACC in which Ambuja Cements holds a little over 50 per cent.
The ACC scrip also climbed on the news and it settled at Rs 2,310.55 — a rise of 2.22 per cent over the last close. Both the companies have a combined market capitalisation of nearly Rs 1.20 lakh crore.
Holcim is also understood to be in negotiations with JSW group. The combined capacity of ACC and Ambuja Cements stands at over 65 million tonnes (mt). UltraTech Cement, part of the Aditya Birla group, is the country’s largest cement maker with a capacity of 117mt.
Holcim has been divesting non-core assets to bring down debt and had sold a Brazilian unit for $1 billion in September. If Holcim is able to finalise a buyer for the stake, the acquirer will have to make an open offer of an additional 26 per cent in Ambuja Cements.
Reports say that since the acquisition in Ambuja Cement will enable the buyer to have an indirect control in ACC, it may have to acquire the 4.48 per cent held by Holcim. An open offer will also have have to be made for ACC.
Holcim entered India’s cement sector in 2005 and has since then brought synergies in the operations of both the companies to reduce costs.
In 2018, ACC and Ambuja Cements entered into master supply agreements for the supply of cement, clinker and raw materials such as fuel, fly ash, slag and gypsum and also spare parts.
In June last year, Adani Enterprises, the flagship of the Adani group had incorporated a new subsidiary-Adani Cement Industries for its foray into the cement business. It was also planning to set up a five million tonne in Maharashtra.
