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Business News/ Companies / News/  Adani set to invest 20k crore in Ambuja
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Adani set to invest ₹20k crore in Ambuja

Buyout of Ambuja, ACC completed; son Karan to be ACC chairman

Post the transaction, Adani will hold 63.15% in Ambuja Cements and 56.69% in ACC (of which 50.05% is held through Ambuja Cements).Premium
Post the transaction, Adani will hold 63.15% in Ambuja Cements and 56.69% in ACC (of which 50.05% is held through Ambuja Cements).

Mumbai: The Adani Family, through Endeavour Trade and Investment Ltd, a special purpose vehicle, has successfully completed the acquisition of Ambuja Cements Ltd and ACC Ltd, which involved the acquisition of Holcim’s stake in Ambuja and ACC along with an open offer in both entities as per Sebi regulations, the Adani group said in a statement on Friday.

The transaction was first announced in May.

The value of the Holcim stake and open offer consideration for Ambuja Cements and ACC is $6.5 billion, which makes this the largest ever acquisition by Adani, and also India’s largest ever M&A transaction in the infrastructure and materials space, the statement said.

Post the transaction, Adani will hold 63.15% in Ambuja Cements and 56.69% in ACC (of which 50.05% is held through Ambuja Cements).

The board of Ambuja Cements has approved an infusion of Rs20,000 crore into Ambuja by way of preferential allotment of warrants, the statement added, to help Ambuja capture the growth in the market.

In a notice to its shareholders, Ambuja Cements said that the company shall utilize the proceeds from the preferential issue of warrants to fund the capital requirement for the purpose of capital expenditures, de-bottlenecking capital expenditure, logistics infrastructure, digitizing logistics, optimizing plants to accelerate ESG compliance, acquisitions, consolidation, working capital requirements, investment in technology and for general corporate purpose.

“What makes cement an exciting business is the headroom for growth in India, which exceeds that of every other country well beyond 2050," said Gautam Adani, chairman, Adani Group.

“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. 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," he said.

All of these dimensions put Adani group on track to become the largest and most efficient manufacturer of cement by no later than 2030, he added.

Currently, Ambuja Cements and ACC have a combined installed production capacity of 67.5 MTPA.

The transaction was financed by facilities aggregating to $4.5 billion availed from 14 international banks. Barclays Bank PLC and Deutsche Bank AG acted as M&A advisors to Adani Family, with Standard Chartered Bank acting as the structuring advisor.

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ABOUT THE AUTHOR
Swaraj Singh Dhanjal
" Based in Mumbai, Swaraj Singh Dhanjal is responsible for Mint’s corporate news coverage. For the past eight years he has been writing on the biggest deals in private equity, venture capital, IPO market and corporate mergers and acquisitions. An engineer and an MBA, he started his journalism career in 2014 with Mint. "
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Published: 16 Sep 2022, 11:28 PM IST
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