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The Adani family said on Sunday it had reached definitive agreements to acquire Swiss company Holcim’s entire stake in two Indian cement companies – Ambuja Cements Ltd and ACC Ltd.
The Adani Group said it will acquire this stake through an offshore special purpose vehicle. The agreement is subject to regulatory approvals.
The value of Holcim’s stake and open offer for Ambuja Cements and ACC is approximately $10.5 billion, making it Adani’s largest-ever acquisition, the Gautam Adani-led conglomerate said. in a press release.
It will also be India’s largest M&A deal ever in infrastructure and materials.
Holcim, through its subsidiaries, owns 63.19% of Ambuja Cements and 54.53% of ACC – of which 50.05% is held through Ambuja Cements.
“Our entry into the cement business is further validation of our faith in our country’s growth story,” Gautam Adani, Chairman of Adani Group, said in a statement.
“Not only is India expected to remain one of the world’s largest demand-driven economies for decades to come, but India also continues to be the world’s second largest cement market and yet accounts for less than half of the world’s average per capita cement consumption. In statistical comparison, China’s cement consumption is more than 7 times that of India. When these factors are combined with several adjacent activities of our existing businesses, including port activities and logistics, energy and real estate businesses of the Adani Group, we believe we will be able to build a uniquely integrated and differentiated business model and prepare for significant capacity expansion,” he adds.
“Ambuja Cements and ACC are two of the strongest brands recognized across India. When complemented by our renewable energy generation footprint, we gain a big head start on the decarbonization journey that is essential for cement production. This combination of all our abilities makes me confident. that we will be able to establish the cleanest and most sustainable cement manufacturing processes that will meet or exceed global standards,” says the richest person in Asia.
“Holcim’s global leadership in cement production and sustainability best practices provides us with some of the cutting-edge technologies that will enable us to accelerate the path to greener cement production,” he said. he.
With cement consumption in India of only 242 kg per capita, compared to the global average of 525 kg per capita, the growth potential of the cement sector in India is significant.
Tailwinds from rapid urbanization, growing middle class and affordable housing, as well as post-pandemic recovery in construction and other infrastructure sectors are expected to continue to drive growth in the cement sector over the coming years. next decades.
Ambuja Cements and ACC currently have a combined installed production capacity of approximately 70 million tonnes per annum (MTPA). The two companies own 23 cement plants, 14 grinding stations, 80 ready-mix plants and more than 50,000 distribution partners across India.