Finally, the speculation and gossips around Holcim’s (holding company of Ambuja Cement and ACC) stake sale has come to rest.
Adani Group has bid for the stakes of both Ambuja and ACC. And has agreed to buy Holcim’s entire stake. This includes all of Holcim’s Indian operating entities for a total consideration of US$ 10.5bn (including open offer).
The shares of Ambuja Cement and ACC are already up 5% and 8% respectively (at 10:30AM).
Other bidders for this deal include JSW and UltraTech Cement.
As per the exchange filings, Holcim has signed a binding agreement for the Adani Group to acquire its business in India. This comprises of 63.11% stake of Holcim in Ambuja, which owns a 50.05% interest in ACC, as well as its 4.48% direct stake in ACC. The corresponding offer is Rs 385 per share for Ambuja Cement and Rs 2,300 per share for ACC. This translates into cash proceeds of CHF 6.4 billion for Holcim (around $10.5 billion).
This deal is expected to close in the second half of the calendar year 2022.
Adani Group is likely to emerge as the second-largest cement player in the country, next only to UltraTech Cement. Adani is expected to have 70 million tonnes per annum capacity. Ambuja and ACC each have about 35 million tonnes of capacity per year.
But note that the deal is yet to receive approval from the competition commission of India (CCI).
|Offer price per share (Rs)||385||2300|
|Current share price (Rs)||364.95||2185.10|
|Holcim stake (%)||63.11||4.48|
|Cement Production Capacity||31.45 MTPA||36 MTPA|
|Capacity Utilization (%)||86||78|
|Distribution Network (no. of dealers)||50,000||56,000|
|Presence in India||50 districts across 11 states||Across 12 states|
Adani Group sees potential in India’s cement industry due to the following:
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Research Analyst: Bavadharini KS