Shares of Ambuja Cements and ACC surged over 3% and 7%, respectively, in Monday’s early deals on the BSE after conglomerate Adani Group said it would buy Holcim AG’s controlling stake in the companies.
Adani Group became the second largest cement producer in the country after the Aditya Birla Group owned UltraTech Cement, the company said in a statement.
The JSW Group was also in the race to acquire the Ambuja-ACC combine, but lost out to Gautam Adani, who entered into definitive agreements for the acquisition through an offshore special purpose vehicle.
‘Our move into the cement business is yet another validation of our belief in our nation’s growth story,’ Mr. Adani said of the deal.
‘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.’ he added.
Holcim expects to receive 6.4 billion Swiss francs ($6.4 billion) of cash proceeds from the sale. The divestment in its India businesses is being seen as a move to reduce its carbon-intensive cement products which have been putting off its many environmentally-conscious investors.
The Adani Group said it would acquire more shares through an open offer.
Adani, who recently took over from Mukesh Ambani as Asias richest man according to many media reports, entered into definitive agreements for the acquisition, through an offshore special purpose vehicle.
In the last couple of years, the Adani Group has diversified beyond its core business of ports, power and and coal mines into airports, data centres and clean energy.
The transaction is expected to close in the second half of 2022, even as Ambuja Cements and ACC share prices saw an uptick over the announcement.