Adani Forges $10.5 Billion Deal And Forays Into Cement Production: Highlights

Adani Group wins the race to buy Swiss cement major Holcim’s stake in Ambuja cements and its subsidiary ACC for $10.5 billion (around ₹ 81,361 crore), including open offers, marking the ports-to-energy conglomerate’s entry into the cement sector and making it the second-largest cement producer in the country.
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Shares of Ambuja Cements and unit ACC rose 2.9 per cent and 6.4 per cent, respectively, on Monday, a day after conglomerate Adani Group said it would buy Holcim AG’s controlling stake in the companies. Shares of Adani enterprises rose 2.75 per cent, while rivals UltraTech Cement and Shree Cement fell 2.5 per cent and 1.8 per cent, respectively, and were among the top losers on the Nifty 50 index.
Currently, Aditya Birla group, which owns the brand ultra tech cement, is India’s top cement producer. The Aditya Birla Group was also racing to buy out Holcim’s stake after the firm announced its exit from India. But Asia’s richest man Gautam Adani’s group, Sunday, clinched the deal and is seen as a big win for Gautam Adani, chairman of the Adani group.
Holcim owns 63.19 per cent in Ambuja Cement and 4.48 per cent in ACC ltd. Ambuja Cement, in turn, owns 50.05 per cent in ACC.
Holcim was planning to exit India following its decision to focus on the group’s ‘strategy 2025’ that aims for sustainable solutions for the building materials sector. But many believe the intense scrutiny of its India operations by the Competition Commission of India (CCI), which opened its second investigation against the company in December 2020, could also be one of the reasons why the company was in a hurry to move out.
The latest development also marks India’s biggest outflow of foreign direct investment after Cairn Energy’s exit from India in 2010. The Adani group says this acquisition propels Adani into the cement business and will establish its new materials, metal and mining vertical with this deal.
Adani is now India’s second-largest cement manufacturer, with a capacity of 70 metric tonnes per annum. The Aditya Birla group’s capacity is 117 metric tonnes per annum. The Adani group has a large gap to fill and, in all likelihood, will be looking to expand further in this sector.
“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,” Adani Group Chairman Gautam Adani said in a tweet after the announcement.
“Our move into the cement business is yet another validation of our belief in our nation’s growth story,” said the Chairman of the Adani Group said.
“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 cement market yet has less than half of the global average per capita cement consumption. In statistical comparison, China’s cement consumption is over 7x India’s,” said Mr Adani.
“When these factors are combined with the several adjacencies of our existing businesses, 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,” he added.