The acquisition of Ambuja Cements and ACC Ltd by Adani Group was announced in May 2022. Both the cement companies which have a significant presence in the Indian cement market were subsidiaries of global building material manufacturer, Holcim. Holcim owned by multinational conglomerate Holcim Group is based in Switzerland.
News reports suggest that Adani Group completed the acquisition of ACC Limited and Ambuja Cements Ltd through a special purpose vehicle named Endeavour Trade and Investment Limited.
Structure of Acquisition
Adani Group is carrying out the acquisition of Ambuja Cements and ACC Ltd through both a share transfer from Holcim and an open offer in the share market.
As part of the acquisition, Adani Group has paid 6.4 billion dollars in cash to Holcim Limited. Holcim Limited had a 63.1% stake in Ambuja Cements directly and through various subsidiaries. Ambuja Cements has got 50.04% stake in ACC Limited. Holcim Also has an additional 4.4% stake in ACC Limited directly.
Following the deal, Adani Group has control of a 63.19% stake in Ambuja Cements and a 54.53% stake in ACC Limited. Both Ambuja Cements and ACC Limited are public companies which are traded on stock exchanges in India.
Apart from direct share transfer from Holcim, Adani Group also plans to purchase an additional stake in both cement producers via an open offer to existing shareholders.
The acquisition deal will make Adani group owners of the second-largest cement manufacturers in India just below UltraTech Cement owned by Aditya Birla group.
The acquisition of Ambuja Cements and ACC Ltd is also considered the largest merger and acquisition deal in the history of infrastructure material space in India.
Holcim Limited has been reportedly planning to wind up its business in India as back-to-back legal and economic challenges became a hurdle to conducting business.
Through the acquisition of Ambuja Cements and ACC Ltd, Adani Group is planning to add one more profitable sector to its wide range of businesses.
The multinational conglomerate based in Ahmedabad currently has a business presence in multiple sectors such as renewable energy, ports, agriculture, media, real estate, power transmission and retailing.
Gautam Adani, chairman of MNC said that the cement business in India has the headroom to grow well beyond 2050.
He also added that the experience of the conglomerate in the renewable energy business will assist them to produce premium quality green cement.