Mumbai: The Adani family has completed the acquisition of Ambuja Cements Ltd and ACC Ltd through a particular purpose vehicle, Endeavor Trade and Investment Ltd, along with the purchase of Holcim’s stake in Ambuja and ACC through an open offer in both the entities have taken included. Following SEBI regulations, the Adani Group said in a statement on Friday.
First announced the transaction in May.
With the acquisition of the stake in Holcim, Adani is on track to become one of the essential cement producers in the country. Adani’s addition was significant as the company sought to capitalize on India’s growing momentum. This trend of the company has been there in the past as well. The company has acquired large stakes in several cement companies, including some of India’s largest suppliers.
That has established Adani as one of the most prominent players in the market. It is clear that the company has a very close eye on the cement market and will continue to take strategic steps to strengthen its position, as well as India’s most significant M&A in infrastructure and materials, the statement said.
The Adani Group has settled to acquire a controlling stake in cement maker ACC and its subsidiary Ambuja Cements for about Rs 5,200 crore. In a filing to BSE, Adani said that its wholly owned subsidiary Adani Investments Private Limited had acquired a 63.15% stake in Ambuja Cements (of which 56.69% through Ambuja Cements) from the promoters of Adani Group and Has agreed on A definite agreement.
The filing said Tata Sons, through its subsidiary Tata Investment Corp (TIC), will sell its entire 44.99% stake in ACC and 56.69% in Ambuja Cements to Adani for around Rs 5,200 crore.
“After the transaction, TIC will have an 18% stake in Ambuja Cements. The proposed transaction is subject to critical regulatory approvals and expects to be complete in the next three months,” the filing said.
The council of Ambuja Cements has approved an investment of Rs 20,000 crore in Ambuja through preferential allotment of warrants, the statement said, to help Ambuja capture the boost in demand.
In a statement to its shareholders, Ambuja Cements said the company warrants to meet the capital requirement for reducing capital expenditure on preferential issues of logistics infrastructure, logistics ESG compliance, acquisitions, consolidation, and digitization. The proceeds will be utilized for capital requirements—investment in plant optimization, technology and general corporate objectives.
“What creates a thrilling business is a headroom for growth in India, which is more than every different country after 2050,” said Gautam Adani, Chairman, Adani Group.
“Cement is a game of economics hanging on power costs, logistics and disbandment costs, and the capacity to leverage a digital medium to change production and reach significant reserve chain efficiencies. Each of these efficiencies is a challenge that we need to overcome.”
The core business provides a set of unmatched adjacencies to our cement business. This proximity ultimately drives competitive economics. Furthermore, our position as one of the world’s largest renewable energy companies allows us to achieve a circular economy. It will help manufacture premium quality Green Cement in line with the principles.
He said that all these dimensions set the Adani Group to become the largest and most efficient cement manufacturer by 2030.
Ambuja Cements and ACC have an incorporated installed production capacity of 67.5 MTPA. Ambuja Cements has an installed capacity of 35 MTPA, out of which 30 MTPA capacity is in operation. Its cement manufacturing plants are located at Bhadravati in Shimoga district and Nanjangud in Mysore district. ACC has a cement plant at Adichunchanagiri in Hassan district and a grinding unit at Gubbi in Tumkur district.
They financed The transaction with $4.5 billion in facilities acquired from 14 international banks. Barclays Bank plc and Deutsche Bank AG worked as M&A advisors to the Adani family, with Standard Chartered Bank acting as structure advisor.