Adani to buy Holcim’s stake in Ambuja Cements, ACC for $10.5 billion

Gujarat-based listed entity Ambuja Cement informed the Bombay Stock Exchange in a statement late on Sunday (May 15) night that the Adani Group has entered into definitive agreements to acquire Swiss cement major Holcim Ltd’s business in India for around $10.5 billion. The deal comprises Holcim’s 63.11 stake stake in Ambuja Cement, which owns a 50.05 per cent interest in ACC Ltd, another cement maker, as well as Holcim’s 4.48 per cent direct stake in ACC. 

Our belief in the India story is unshakeable. Combining @Holcim‘s cement assets in India with our green energy and logistics will make us the world’s greenest cement company. Jan Jenisch has been terrific to work with. We welcome the @AmbujaCementACL & @ACCLimited teams. pic.twitter.com/iThyLp92iV

— Gautam Adani (@gautam_adani) May 15, 2022

The deal, which marks India’s biggest in the infrastructure and materials space, makes Adani the second-largest cement maker in the country. It also represents the largest ever merger and acquisition (M&A) transaction of the Gautam Adani-led group. It will be carried out through an offshore special purpose vehicle (SPV).

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With this, Adani now becomes India’s second largest cement manufacturer with a capacity of about 70 mtpa. Aditya Birla Group’s UltraTech Cement retains the top spot.

India’s growth story

“Our move into the cement business is yet another validation of our belief in our nation’s growth story,” Adani Group’s Chairman Gautam Adani said in the statement. “Not only is India expected to remain one of the world’s largest demand-driven economies for several decades, India also continues to be the world’s second largest cement market and yet has less than half of the global average per capita cement consumption. 

“In statistical comparison, China’s cement consumption is over 7x that of India’s. When these factors are combined with the several adjacencies of our existing businesses that include the Adani Group’s ports and logistics business, energy business, and real estate business, we believe that we will be able to build a uniquely integrated and differentiated business model and set ourselves up for significant capacity expansion.”

The acquisition, subject to regulatory approvals and conditions, is expected to close by the second half of 2022.

Jan Jenisch, CEO, Holcim, said in the BSE statement: “With the Adani Group, we have found a perfect owner to unleash our Indian business’ next era of growth for our people and all stakeholders in a swift and efficient transaction. I am proud of Holcim’s track record in the Indian market, where we significantly increased our capacity over the years, while advancing our leadership in sustainability.”