Adani seals $10.5 bn deal for Holcim's cements business in India
16 May 2022
Infrastructure major Adani Enterprises has acquired a controlling stake in Ambuja Cements and its subsidiary ACC from Swiss building materials giant Holcim, in a $10.5 bn deal, to become India's second-biggest cement maker with a combined annual capacity of 70 million tonnes.
Adani Group, led by Gautam Adani, Asia's richest person, acquired 63.19 per cent of Holcim’s two cement units in India Ambuja Cements Ltd and its subsidiary ACC in fierce bidding with local rivals.
With 70 million tonnes of annual production capacity, the Adani Group will be India’s second biggest cement manufacturer after the Kumarmangalam Birla Group company UltraTech Cement which has 120 million tonnes capacity.
This is also Adani's biggest acquisition in India. The Adani family, through an offshore special purpose vehicle, had entered into definitive agreements for the acquisition of Holcim Ltd’s entire stake in Ambuja and ACC, the Adani Group said in a statement.
Adani Group said it would acquire more shares through an open offer.
The divestment is the latest move by Holcim as it seeks to reduce its reliance on polluting businesses. As part of this, the Switzerland-based company has accelerated its efforts to get out of carbon-intensive cement making.
Holcim said in a statement it had signed a binding agreement for the Adani Group to acquire Holcim's business in India, comprising its stake in Ambuja Cement, which owns a 50.05 per cent interest in ACC, as well as its 4.48 per cent direct stake in ACC. Holcim would receive nearly $6.4 billion for the stakes.
The transaction is expected to close in the second half of 2022, Holcim said.
Adani Group's flagship firm Adani Enterprises Ltd has two cement subsidiaries. Adani Cementation Ltd plans to build an integrated facility in Gujarat and Maharastra.
Ambuja Cement has 14 plants, employing 4,700 people. ACC has 17 plants and 78 ready mix concrete factories and employs 6,000 people.
Official sources said the latest deal was the biggest divestment since Holcim merged with French rival Lafarge in 2015.
Since then the company has been selling fringe parts of its business as it seeks to concentrate on North America and Europe.
Last year the company sold its Brazilian operation for $1.025 billion and it also exited the Philippines and Indonesia.