Gautam Adani nears $10bn deal for Swiss-based group: report
Conglomerate Gautam Adani is about to complete a transaction to acquire a majority stake in Holcim Ltd’s businesses. in India. Bloomberg reports, citing people familiar with the matter.
Also, Adani, other corporate giants like Aditya Birla Group and JSW Steel were in the running to acquire Holcim’s stake in Ambuja Cements and ACC – the country’s two largest cement companies, according to news reports.
Adani Group is finalizing the final details of a $10 billion deal for 63.1 percent of Ambuja Cements Ltd. along with associated assets, the people said, asking not to be identified if confidential information was discussed. A transaction could be announced in the coming days, it said. Bloomberg report said.
Holcim announced its exit from India last month
The world’s largest cement maker Holcim last month announced its withdrawal from the country after a long struggle here. The Company has two publicly traded companies, ACC and Ambuja, with a capacity of 66 million tonnes per year (MTPA).
The group entered the market 17 years ago and the exit will put its listed Ambuja and ACC weapons up for sale. Holcim owns 63.19 percent of Ambuja and 4.48 percent of ACC, while Ambuja owns 50.05 percent of ACC.
Holcim’s exit is part of the Group’s “Strategy 2025”, which aims to find sustainable solutions for the building materials industry. The importance of cement in the Group as a whole is already declining compared to ready-mixed concrete, aggregates, roofing and green building solutions.
The sale of shares in Ambuja will trigger an open offer at both ACC and Ambuja.
Since Holcim has a large stake in Ambuja and only a small fraction directly in ACC, the buyer can only buy out Holcim’s 63 percent stake in Ambuja and then trigger an open bid for an additional 26 percent in Ambuja.
When fully underwritten, a new owner can end up owning 89 percent of the company. This could be an $8.7 billion transaction at the current market price.
Holcim is looking for a quick sale of assets in India. Control of the two companies will give the successful bidder a huge head start, and Holcim’s move has generated tremendous interest from potential suitors.
India, one of the most attractive global cement markets
India is one of the most attractive cement markets globally, as evidenced by the presence of names such as Heidelberg Cement (founded through the acquisition of Italcementi in 2015), but with a capacity of 12.6t.
In 2014, French Holcim and Swiss Lafarge merged their operations worldwide to form LafargeHolcim and this resulted in Lafarge India launching its 11 MT (it came to India in the late 1990s) to derive from the Nirma Group to be picked up. Lafarge grew in India through acquisitions and had also bought the cement business in 1999 and then acquired Ambuja.
(With PTI inputs)
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Published on: Sunday May 15, 2022 8:16 PM IST