Adani Will Become India's Second-largest Cement Producer With The $10.5 Billion Acquisition of Holcim

Adani Group announced on Sunday that it has bought a majority stake in Holcim (SIX:HOLN) AG's cement assets in India for $10.5 billion to become the second largest cement maker in India.

The conglomerate of Asia's richest man, Gautam Adani, purchased 63.19 percent of Ambuja Cements Ltd and its subsidiary ACC through tough competition with local competitors.

The divestment is Holcim's most recent effort to minimize its reliance on cement manufacture, a carbon-intensive industrial process that has alienated many eco-conscious investors.

In recent years, the Swiss company increased its efforts to abandon carbon-intensive cement production.

Ambuja and ACC have an annual cement production capacity of at least 70 million tonnes, second only to UltraTech Cement's 120 million tonnes.

The Adani family, through an offshore special purpose company, has entered into definitive agreements to acquire Holcim Ltd's full share in Ambuja and ACC, according to a statement from the Adani Group.

Holcim said in a press release that it had reached a binding deal for the Adani Group to acquire Holcim's business in India, including its share in Ambuja Cement, which owns a 50.5% ownership in ACC, and its 4.4% direct stake in ACC. Holcim would receive around $6,400,000,000 for the stakes.

The Adani Group announced that it would purchase additional shares via an open offer.

The deal is anticipated to finalize in the second part of 2022, according to Holcim.

Adani Enterprises Ltd, the flagship company of the Adani Group, includes two cement companies. Adani Cementation Ltd aims to construct an integrated factory in the western states of Gujarat and Maharashtra, according to an Adani group executive.

Ambuja Cement has 14 cement factories and employs 4,700 individuals. ACC employs 6,000 workers and operates 17 cement facilities and 78 ready mix concrete factories.

According to official sources, the most recent transaction was the largest divestiture since Holcim combined with its French rival Lafarge in 2015.

In an effort to concentrate on North America and Europe, the company has since sold off its ancillary business operations.

The company sold its Brazilian operations for $1.02 billion and quit the Philippine and Indonesian markets last year.