Adani To Acquire Ambuja And ACC Cement Companies For $10.5 Billion, India's Largest-Ever Acquisition In Sector

Through an offshore special purpose vehicle (SPV), the Adani Group announced on Sunday (1 May) that it had entered into definitive agreements for the acquisition of Switzerland-based Holcim Ltd's entire stake in Ambuja Cements and ACC Ltd.

The value for the Holcim stake and open offer consideration for Ambuja Cements and ACC is USD 10.5 billion, making India's largest-ever acquisition transaction in the infrastructure and materials space.

Holcim, through its subsidiaries, holds 63.19 per cent in Ambuja Cements and 54.53 per cent in ACC (of which 50.05 per cent is held through Ambuja Cements).

Ambuja Cements and ACC currently have a combined installed production capacity of around 70 Million Tonnes Per Annum (MTPA). The two companies are among the strongest brands in India, with immense depth of manufacturing and supply chain infrastructure, represented by their 23 cement plants, 14 grinding stations, 80 ready-mix concrete plants and over 50,000 channel partners across India.

With India's cement consumption at just 242 kg per capita, compared to the global average of 525 kilograms per capita, there is significant potential for the growth of the cement sector in India.

Adani Group said in a statement that rapid urbanization, the growing middle class and affordable housing, and the post-pandemic recovery in construction and other infrastructure sectors are expected to continue driving the growth of the cement sector over the next several decades.

"Both Ambuja and ACC will benefit from synergies with the integrated Adani infrastructure platform, especially in the areas of raw material, renewable power and logistics, where Adani Portfolio companies have vast experience and deep expertise. This will enable higher margins and return on capital employed for the two companies," the company said.

"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 seven times that of India's. When these factors are combined with the several adjacencies of our existing businesses, we believe that we will be able to build a uniquely integrated and differentiated business model and set ourselves up for significant capacity expansion," said Gautam Adani, Chairman of the Adani Group.

"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," he added.