Adani Group is now the second-largest cement producer after completing the acquisition of Ambuja Cements, or ACC 2022
The Adani family said on Friday that it has completed buying Ambuja Cements & ACC Ltd., making it the second-largest cement producer in the country. According to a statement, the Adani family completed the acquisition using their particular purpose business, Endeavour Trade and Investments Ltd, after concluding the plan with the Swiss company Holcim through an open deal.
According to SEBI regulations, “the transaction entailed the purchase of Holcim’s holding in Ambuja and ACC together with an open call in both firms,” it stated. The value of the Holcim holding plus the open price for Ambuja Cements and ACC is USD 6.50 billion, making this the largest acquisition by Adani and the largest M&A in India’s history for infrastructure and materials, it continued.
Following the purchase, Adani will own 56.69 percent of ACC and a 63.15 percent share in Ambuja Cements. According to Gautam Adani, “India’s headroom for expansion, which surpasses that of other country far beyond 2050, makes cement an intriguing industry.” The Adani Group said in a statement in May of this year that it had reached an agreement to buy the majority of the Indian operations of Holcim Ltd.
The installed capacity of Ambuja Cements and ACC is now 67.5 MTPA. The Corporation of Ambuja Cements gave its approval to a 20,000 crore rupee (Rs) preferential warrant allocation to Ambuja. This will allow Ambuja to seize the market’s expansion. According to the corporate ethos of the Adani Group, the steps will majorly speed up wealth creation for all stakeholders.
Synergies with the complete Adani infrastructure platform will be profitable for Ambuja Cements and ACC, especially in the fields of raw materials, renewable energy, and logistics, where Adani Property companies have big experience and in-depth knowledge.
Adani’s emphasis on ESG, the circular economy, and capital management theory will be beneficial to Ambuja and ACC. With a focus on SDG 6 (clean, clean water), SDG 7 (affordable and sustainable power), SDG 11 (sustainability cities and communities), and SDG 13, the companies will continue to be closely aligned with the UN Sustainable Development Goals (SDG) (climate action).
The members of Ambuja Cements and ACC have been reorganized in accordance with the governance philosophy of the Adani Portfolio. Both the nomination and compensation committee and the audit member committee now have all independent members.
In order to assure the members of directors of ESG obligations and maximize customer satisfaction, two new committees have been formed: the Public Consumer Committee and the Corporate Responsibility Committee, both of which are composed of 100% independent directors. A Commodities Prices Committee made up of 50% independent directors has been established to improve risk management. The deal was funded by $4.50 billion in facilities got from 14 multinational banks.
The two businesses are some of the strongest in India, with a big supply chain and production infrastructure. They have 14 integrating units, 16 grinding modules, 79 ready-mix cement factories, and more than 78,000 channel partners spread out over the country. UltraTech, a member of the Aditya Birla group, is the industry leader in cement, with an installed capacity of over 100 MTPA.
The Ambuja Cement board is expected to meet on Friday to discuss raising money through loans or equity. This occurs after the widespread rumours of a leadership transition at the cement manufacturer. The agreement with Holcim included the entire 63.11% share in Ambuja Cement and the 4.48% direct stake in ACC. In ACC, Ambuja holds a 50.05% stake.
Following major advances over the other month, Ambuja Cement and ACC stocks fell by 4.17% and 5.1% at 3:20 pm on Friday, respectively. Gautam Adani, the founder and current chairman of the group, was appointed to lead Ambuja Cements. He appointed his son Karan, who oversees the group’s ports division, to the president of ACC Ltd. and director of both cement companies.
Additionally, Adani Group swiftly appointed independent directors to the two companies’ boards. These included former Shell India president Nitin Shukla and State Bank of India (SBI) chair Rajnish Kumar on Ambuja Cement and ACC boards, respectively.
The third richest man in the world, 60-year-old Gautam Adani, has two sons named Karan and Jeet. Jeet, the conglomerate’s younger son, is the vice president of group finance and a graduate of the University of Pennsylvania’s School of Engineering and Applied Sciences.
For the purpose of allowing the business “to capture the expansion in the market,” the board of Ambuja Cements authorized an investment of Rs 20,000 crore through the preferential allotment of warrants.
The two cement companies were bought by Adani, making it the largest buyout in the country’s history of the infrastructures and material sector. According to a statement, the Adani family completed the acquisition using their particular purpose business, Endeavour Trade and Investments Ltd, after concluding the plan with the Swiss company Holcim and open bid.
Including Barclays and Deutsche Bank AG, “the plan was financed by facilities amounting to USD 4.50 billion available from 14 international institutions.” According to Gautam Adani, chairman of the Adani Group, Cement is an exciting industry with possibilities for growth in India that will outpace that of every other country through 2050.
According to him, the economics of cement depends on factors like energy prices, distribution and logistics costs, and the capacity to use digital platforms to alter production and majorly improve supply chain efficiencies.
“Additionally, we will be able to produce super-premium green cement in accordance with the values of a circular economy thanks to our status to be one of the world’s largest renewable energy companies in the world. We are on course to become the biggest and most productive cement manufacturer by 2030 based on all of these metrics, “he said.
According to the declaration, the management of Ambuja Cements authorized an investment of Rs 20,000 crore through a preferential warrant allocation. “This will allow Ambuja to seize the market’s expansion. According to the corporate philosophy of the Adani group, the steps will greatly expedite productivity gains for all partners, “said a note.
In accordance with the governance philosophy of the Adani Portfolio, the council members of both Ambuja Cements and ACC have been reformed.
“Entirely independent Directors now make up the Internal Auditors and the Nominating & Compensation Committee. To give the board concerning the ESG promises and maximize customer reviews, two new committees have been formed: the Public Consumer Committee and the Corporate Responsibility Committee, both of which are of 100% independent directors, “It read.
The installed manufacturing unit of Ambuja Cements and ACC is now 67.5 million tonnes annually (MTPA). With a capacity percentage of 119.95 MTPA, UltraTech Cement, a member of the Aditya Birla Group, is the market leader.
In May of this year, the Adani group stated that it had reached an agreement to buy a controlling interest in Holcim Ltd’s Indian businesses and made a following the offer to the common stockholders to buy 26% ownership in both companies.
The deal’s first value was pegged at roughly USD 10.5 billion (Rs 81,360 cr), including Rs 31,000 crore from the offer. Investors had a muted response to the open invite, which ended on September 10. Only 8.28% of the target share in ACC Ltd could be bought. However, only 1.35 % of the shares in Ambuja Cements were tendered.
Edited by Prakriti Arora