Adani to buy Holcim's stake in Ambuja Cements, ACC in $10 billion deal

The Adani family on Sunday said it has entered into definitive agreements for the acquisition of Switzerland-based Holcim's entire stake in two Indian cement companies – Ambuja Cements Ltd and ACC Ltd.

The Adani group said it will acquire this stake through an offshore special purpose vehicle. The deal is subject to regulatory approvals.

The value for the Holcim stake and open offer consideration for Ambuja Cements and ACC is around $10.5 billion, making this the largest ever acquisition by Adani, the Gautam Adani-led conglomerate says in an statement.

It will also be India's largest ever M&A transaction in the infrastructure and materials space.

Holcim, through its subsidiaries, holds 63.19% in Ambuja Cements and 54.53% in ACC - of which 50.05% is held through Ambuja Cements.

"Our move into the cement business is yet another validation of our belief in our nation's growth story," Gautam Adani, chairman of the Adani Group, says in a statement.

"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. In statistical comparison, China's cement consumption is over 7x that of India's. When these factors are combined with the several adjacencies of our existing businesses that include the Adani Group's ports and logistics business, energy business, and real estate business, we believe that we will be able to build a uniquely integrated and differentiated business model and set ourselves up for significant capacity expansion," he adds.

"Ambuja Cements and ACC are two of the strongest brands recognized across India. When augmented with our renewable power generation footprint, we gain a big headstart in the decarbonization journey that is a must for cement production. This combination of all our capabilities makes me confident that we will be able to establish the cleanest and most sustainable cement manufacturing processes that will meet or exceed global benchmarks," says the richest person in Asia.

"Holcim's global leadership in cement production and sustainability best practices brings to us some of the cutting-edge technologies that will allow us to accelerate the path to greener cement production," he says.

With India's cement consumption at just 242 kg per capita, as compared to the global average of 525 kg per capita, there is significant potential for the growth of the cement sector in India.

The tailwinds of rapid urbanisation, the growing middle class and affordable housing together with the post-pandemic recovery in construction and other infrastructure sectors are expected to continue driving the growth of the cement sector over the next several decades.

Ambuja Cements and ACC currently have a combined installed production capacity of around 70 million tonnes per annum (MTPA). The two companies have 23 cement plants, 14 grinding stations, 80 ready-mix concrete plants and over 50,000 channel partners across India.