Adani Group Eyeing The Cement Lord Throne

Photo by Anaya Katlego on Unsplash

​​The biggest acquisition of an Indian company has been Walmart’s acquisition of Flipkart for $16 billion in 2018. The purchase of Essar Oil by Russia’s Rosneft for $12.9 billion in 2017 also ranks among the top acquisitions involving an asset in the country. Now there’s another one charging forth for the records.

Asia’s richest man, Gautam Adani’s group, has bought Swiss cement major Holcim’s stake in Ambuja cements, and its subsidiary ACC in the most expensive ever. Tagged at a price of $10.5 billion, it marks the ports-to-energy conglomerate’s debut into the cement sector.

Chemical Race

Aditya Birla Group, owner of the brand Ultra Tech Cement and India’s current leading cement producer, was also betting on Holcim’s stake after the firm announced its exit from India. 

However, on Sunday, Adani sealed the deal with Holcim which would make it the second-largest cement producer in the country.

Searching For Safer Shores

Holcim was planning to exit India to focus on more sustainable solutions. It is also suspected that Holcim was trying to scuttle away from the intense scrutiny of the CCI, which opened its 2nd investigation against the company in 2020. Both Ambuja and ACC were found guilty of price cartelisation in a 2016 investigation – and now it’s going to be Adani paying up for their antitrust fines. Sigh!

What’s The Big Deal?

After a successful open offer, Adani’s stake in Ambuja will increase to 89% and 81% in ACC. Shares of Adani enterprises rose 2.75%, while rival UltraTech Cement’s slipped down by 2.5% after the announcement.

Too long? Here’s a one-liner: Adani Group buys Swiss cement major Holcim’s stakes in Ambuja Cement and ACC for $10.5 Bn – the biggest ever, making it the 2nd largest cement producer in India.

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