Billionaire Gautam Adani enclosed a $10.5 billion deal on Sunday that gives his conglomerate a 63.19 percent stake in Swiss cement major Holcim Ltd’s India operations, Ambuja Cements Ltd and its subsidiary ACC.
The Adani Group has become the country’s second largest cement producer, following the Aditya Birla Group’s UltraTech Cement, according to a statement from the company.
Holcim, through its subsidiaries, holds 63.19 per cent stake in Ambuja Cements and 54.53 per cent in ACC (of which 50.05 per cent is held through Ambuja Cements). The value for the Holcim stake and open offer consideration for Ambuja Cements and ACC at $10.5 billion makes this India’s biggest M&A transaction in the infrastructure and materials space, the Adani Group said.
Holcim expects to receive 6.4 billion Swiss francs ($6.4 billion) of cash proceeds from the sale. The Adani Group said it would acquire more shares through an open offer. The transaction is expected to close in the second half of 2022.
The divestment in its India businesses is the latest move by Holcim to reduce its reliance on carbon-intensive cement production, an industrial process which produces high levels of CO2 emissions and has therefore deterred many environmentally-conscious investors.
Adani, touted as Asia’s richest man by Forbes, entered into definitive agreements for the acquisition of Holcim Ltd’s entire stake in Ambuja and ACC through an offshore special purpose vehicle.
The Adani Group has expanded beyond its core business of operating ports, power plants, and coal mines in recent years to include airports, data centers, and clean energy.
Last year, the group established two cement subsidiaries: Adani Cementation Ltd, which planned to build two cement plants in Dahej, Gujarat, and Raigarh, Maharashtra, and Adani Cement Ltd.