Holcim concludes its sale to the Adani Group for $6.4 billion

AHMEDABAD: In what is pegged as India’s largest ever merger and acquisition (M&A) transaction in the infrastructure and materials segment, Adani Group through a special purpose vehicle, Endeavour Trade and Investment Limited (ETIL), successfully acquired Swiss cement maker, Holcim’s full stakes in Ambuja Cement Limited and ACC Limited.

With this, Holcim has closed the sale of its India business in India to the Adani Group resulting for cash proceeds of US $6.4 billion (Approximately Rs 51,821 crore) at a share price of Rs 385 per share. Adani has now emerged as the second largest cement player in India.

Following this transaction, Adani will hold 63.15% stake in Ambuja Cements and 56.69% in ACC (of which 50.05% is held through Ambuja Cements alone.

Adani Group aims to become the largest and most efficient cement manufacturer by 2030, following the acquisition.

“In addition, our position as one of the largest renewable energy companies in the world will help us manufacture premium quality green cement well in line with the principles of a circular economy. All of these dimensions put us on track to become the largest and most efficient manufacturer of cement by no later than 2030,” said Gautam Adani, chairman, Adani Group.

This transaction comprises Holcim’s entire 63.11% stake in Ambuja Cement, which owns a 50.05% interest in ACC, as well as its 4.48% direct stake in ACC.

“This divestment is another step in our transformation to become the global leader in innovative and sustainable building solutions, strengthening our balance sheet and giving us the firepower to continue our acquisition strategy,” said Jan Jenisch, Holcim CEO.

The transaction was financed by facilities aggregating to US $4.50 billion availed from 14 international banks. These include Barclays Bank PLC, Deutsche Bank AG and Standard Chartered Bank which acted as original mandated lead arrangers and bookrunners to the transaction.

Currently, Ambuja Cements and ACC have a combined installed production capacity of 67.5 million tonne per annum (MTPA). The two companies have immense depth of manufacturing and supply chain infrastructure, represented by their 14 integrated units, 16 grinding units, 79 ready-mix concrete plants and over 78,000 channel partners across India.

Explaining the potential of the business, the billionaire industrialist said, “What makes cement an exciting business is the headroom for growth in India, which exceeds that of every other country well beyond 2050. Cement is a game of economics dependent on energy costs, logistics and distribution costs, and the ability to leverage a digital platform to transform production as well as gain significant supply chain efficiencies.”

“Each one of these capabilities is a core business for us and therefore provides our cement business a set of unmatched adjacencies. It is these adjacencies that eventually drive competitive economics,” he further added.

Meanwhile, the board of Ambuja Cements approved an infusion of Rs 20,000 crore into Ambuja by preferential allotment of warrants. This will equip Ambuja to capture the growth in the market.

The board committees of both Ambuja Cements and ACC have been reconstituted whereas two new committees namely Corporate Responsibility Committee and the Public Consumer Committee entirely comprising independent directors have been constituted as well. The company has also constituted a Commodity Price Committee.



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