The Adani Family stated that it had entered into definitive agreements to buy Holcim Ltd’s full investment in two of India’s top cement companies, Ambuja Cements Ltd and ACC Ltd, through an offshore special purpose company.
Holcim owns 63.19 percent of Ambuja Cements and 54.53 percent of ACC through its subsidiaries (of which 50.05 percent is held through Ambuja Cements). The total value of the Holcim stake and open offer consideration for Ambuja Cements and ACC is USD 10.5 billion, making this Adani’s largest acquisition to date and India’s largest infrastructure and materials M&A transaction.
“Our move into the cement business is yet another validation of our belief in our nation’s growth story. Not only is India expected to remain one of the world’s largest demand-driven economies for several decades. India also continues to be the world’s second largest cement market and yet has less than half of the global average per capita cement consumption. In statistical comparison, China’s cement consumption is over 7x that of India’s. When these factors are combined with the several adjacencies of our existing businesses that 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,”Mr. Gautam Adani, Chairman of the Adani Group.
With India’s cement consumption at only 242 kg per capita, compared to the global average of 525 kg per capita, the cement business in India has a lot of room to grow. Rapid urbanization, the increasing middle class, and inexpensive housing, as well as the post-pandemic recovery in construction and other infrastructure sectors, are predicted to propel the cement sector forward for the next several decades.
“I am delighted that the Adani Group is acquiring our business in India to lead its next era of growth. Mr. Gautam Adani is a highly recognized business leader in India who shares our deep commitment to sustainability, people, and communities. I would like to thank our 10,000 Indian colleagues who have played an essential role in the development of our business over the years with their relentless dedication and expertise. I am confident that the Adani Group is the perfect home for them as well as our customers to continue to thrive,”Mr. Jan Jenisch, CEO of Holcim Limited.
The combined installed production capacity of Ambuja Cements and ACC is now around 70 MTPA. The two enterprises are among India’s most powerful brands, with a vast manufacturing and supply chain infrastructure that includes 23 cement factories, 14 grinding stations, 80 ready-mix concrete plants, and over 50,000 channel partners.
“Holcim’s global leadership in cement production and sustainability best practices brings to us some of the cutting-edge technologies that will allow us to accelerate the path to greener cement production. In addition, Ambuja Cements and ACC are two of the strongest brands recognized across India. When augmented with our renewable power generation footprint, we gain a big headstart in the decarbonization journey that is a must for cement production. This combination of all our capabilities makes me confident that we will be able to establish the cleanest and most sustainable cement manufacturing processes that will meet or exceed global benchmarks,”Mr. Gautam Adani, Chairman of the Adani Group.
Ambuja and ACC will benefit from synergies with Adani’s comprehensive infrastructure platform, particularly in the areas of raw materials, renewable energy, and logistics, where Adani Portfolio firms have extensive experience and knowledge. For both companies, this will result in improved margins and returns on capital utilized.
Adani’s focus on ESG, Circular Economy and Capital Management Philosophy will also benefit the companies. Businesses will remain committed to the UN Sustainable Development Goals, with a particular focus on SDG 6 (Clean Water and Sanitation), SDG 7 (Affordable and Clean Energy), SDG 11 (Sustainable Cities and Communities), and SDG 13 (Sustainable Cities and Communities) (Climate Action).
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