Adani Group bought a majority stake in Swiss cement maker Holcim AG‘s businesses in India in a $10.5 billion transaction to become the country’s second biggest cement producer, the group said.
The conglomerate helmed by Asia’s richest person Gautam Adani bought 63.19% of Ambuja Cements Ltd and its subsidiary ACC in some fierce bidding with local companies.
Shares of Ambuja Cements and ACC rose 2.9% and 6.4%, respectively, in early Monday trading.
The divestment is the latest move by Holcim as it seeks to slash its reliance on cement production, an industrial process which produces high levels of carbon emissions and has therefore deterred many environmentally-conscious investors.
In recent years the Switzerland-based company accelerated its efforts to get out of carbon-intensive cement making.
Ambuja and ACC have a combined capacity to produce at least 70 million tonnes of cement annually, second to UltraTech Cement which has 120 million tonnes capacity.
The Adani family, through an offshore special purpose vehicle, had entered into definitive agreements for the acquisition of Holcim Ltd’s entire stake in Ambuja and ACC, the Adani Group said in a statement.
Holcim Signs Binding Agreement With Adani
Holcim said in a statement it had signed a binding agreement for the Adani Group to acquire Holcim’s business in India, comprising its stake in Ambuja Cement, which owns a 50.05% interest in ACC, as well as its 4.48% direct stake in ACC. Holcim would receive nearly $6.4 billion for the stakes.
The Adani Group said it would acquire more shares through an open offer.
The transaction is expected to close in the second half of 2022, Holcim said.
Adani Group’s flagship firm Adani Enterprises Ltd has two cement subsidiaries. Adani Cementation Ltd plans to build an integrated facility in western Gujarat and Maharastra states, according to an official in the Adani group.
Ambuja Cement has 14 cement plants, employing 4,700 people. ACC has 17 cement plants and 78 ready mix concrete factories and employs 6,000 people.
Official sources said the latest deal was the biggest divestment since Holcim merged with French rival Lafarge in 2015.
Since then the company has been selling fringe parts of its business as it seeks to concentrate on North America and Europe.
Last year the company sold its Brazilian operation for $1.025 billion and it also exited the Philippines and Indonesia.
- Reuters with additional editing by Sean OMeara
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