The market regulator SEBI on Friday approved Adani’s $3.8 billion (approx. ₹10,100 crore) open offer for cement companies Ambuja and ACC. This follows the clearance given by the Competition Commission of India (CCI) last week.
For the unversed, India’s billionaire Gautam Adani’s Adani Group bought Ambuja Cements and ACC from Holcim for $10.5 billion (approx. ₹83,000 crore), advancing to become India’s second largest cement producer in just day. This $10.5 billion transaction included a public offer worth $3.8 billion,
As per the deal, in May, Holcim agreed to dispose of its 63% stake in Mumbai-listed Ambuja Cements to Adani Group, while that of ACC, Adani became the owner of 54.53% stake, comprising a direct 4.5% holding of Holcim, and 50.05% of Ambuja’s stake.
This acquisition was said to be India’s largest ever M&A transaction in the infrastructure and materials space.
As per the note by Mauritius-based entity– Endeavour Trade and Investment, owned by the Adani family, Adani will inject ₹19,880 crore to acquire 26% or 51.63 crore shares of Ambuja Cements from the public at ₹385 a share, and for the ACC, it will buy 26% (4.89 crore shares) from the public at ₹2,300 apiece for ₹11,259 crore (assuming full acceptance).
If the open offer turns successful, Adani’s stake in Ambuja would become 89.11% and in ACC, it will advance to 80.53%.
Notably, Adani’s open offer price for Ambuja is an 8.5% discount to Friday’s closing price while for ACC, it is a 1.7% discount.
SEBI rules mandate the companies to make an offer to buy the stake of minority shareholders if their stake in a listed entity breaches 25%.
ICICI Securities Ltd and Deutsche Bank AG are advising the Adani Group on the open offer.
With this open offer, Adani vies for strengthening its foothold in the cement industry. At present, Aditya Birla Group’s UltraTech Cement rules cement company, with nearly double the capacity of Ambuja Cements and ACC together.
“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,” said Gautam Adani, chairman, of Adani Group.
Together, Ambuja Cements and ACC own 23 cement plants, 14 grinding stations, 80 ready-mix concrete plants, and over 50,000 channel partners across India.
“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,” said Adani.