Adani wins bid for Holicm’s stake in Ambuja Cement and ACC; shares rise

Adani Group has won a $10.5 billion (approximately Rs 81,361 crore) acquisition of Swiss cement giant Holcim’s stake in Ambuja Cement and its subsidiary ACC, including a public offering, marking Port Energy Group’s entry into the cement industry and making it a The second largest cement producer in the country.

Here’s a 10- guide to your story:

  1. Shares in Ambuja Cements and subsidiary ACC rose 2.9 percent and 6.4 percent, respectively, on Monday, a day after conglomerate Adani Group said it would buy a controlling stake in Holcim AG in both companies. Adani Enterprises rose 2.75%, while rivals UltraTech Cement and Shree Cement lost 2.5% and 1.8%, respectively, leading decliners on the Nifty 50 index.

  2. Currently, the Aditya Birla Group, which owns the Ultra tech cement brand, is the largest cement producer in India. Aditya Birla Group is also racing to acquire a stake in Holcim after the company announced its exit from India. But Asia’s richest man, Gautam Adani Group, sealed the deal on Sunday and was seen as a big win for Adani Group chairman Gautam Adani.

  3. Holcim owns 63.19% of Ambuja Cement and 4.48% of ACC ltd. In turn, Ambuja Cement owns 50.05% of ACC.

  4. Holcim decided to focus on the group’s “Strategy 2025”, which aims to provide sustainable solutions for the building materials industry, and therefore plans to exit India. But many believe the intense scrutiny of its Indian operations by the Competition Commission of India (CCI), which a second investigation into the company in December 2020, may also be one reason for the company’s rush to exit.

  5. The latest development also marks India’s largest foreign direct investment outflow since Cairn Energy pulled out of India in 2010. Adani Group said the acquisition pushes Adani into the cement business and will build its new materials, metals and mining verticals through the deal.

  6. Adani is now India’s second largest cement manufacturer with an annual capacity of 70 metric tons. The Aditya Birla Group has an annual production capacity of 117 metric tons. The Adani Group has a big void to fill and will likely look to expand further in the space.

  7. “Our belief in India’s story is unshakable. Combining @Holcim’s cement assets in India with our green energy and logistics will make us the greenest cement company in the world. Working with Jan Jenisch is fantastic. We Welcome to the @AmbujaCementACL and @ACCLimited team,” Adani Group chairman Gautam Adani said in a tweet following the announcement.

  8. “Our foray into the cement business is another validation of our belief in the country’s growth story,” said the chairman of the Adani Group.

  9. “Not only is India poised to continue to be one of the world’s largest demand-driven economies in the coming decades, but India will also continue to be the world’s second largest cement market, but its per capita cement consumption is less than global per capita cement consumption. In comparison, China’s cement consumption is more than seven times that of India,” Mr Adani said.

  10. “When these factors are combined with several adjacent businesses of our existing business, including Adani Group’s ports and logistics business, energy business and real estate business, we believe we will be able to build a uniquely integrated and differentiated business model, and set us up for a massive capacity expansion,” he added.

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