The transaction involved the acquisition of Holcim’s stake in Ambuja and ACC along with an open offer in both entities as per SEBI Regulations.
The value of the Holcim stake and open offer consideration for Ambuja Cements and ACC is $6.50 billion, which makes this the largest ever acquisition by Adani, and also India’s largest ever M&A transaction in the infrastructure and materials space.
Post the transaction, Adani will hold 63.15 per cent in Ambuja Cements and 56.69 per cent in ACC (of which 50.05 per cent is held through Ambuja Cements).
“What makes cement an exciting business is the headroom for growth in India, which exceeds that of every other country well beyond 2050,” said Gautam Adani, Chairman, Adani Group.
“Cement is a game of economics dependent on energy costs, logistics and distribution costs, and the ability to leverage a digital platform to transform production as well as gain significant supply chain efficiencies. Each one of these capabilities is a core business for us and therefore provides our cement business a set of unmatched adjacencies.
“It is these adjacencies that eventually drive competitive economics. In addition, our position as one of the largest renewable energy companies in the world will help us manufacture premium quality green cement well in line with the principles of a circular economy. All of these dimensions put us on track to become the largest and most efficient manufacturer of cement by no later than 2030,” he added.
Currently, Ambuja Cements and ACC have a combined installed production capacity of 67.5 MTPA. The two companies are among the strongest brands in India with immense depth of manufacturing and supply chain infrastructure, represented by their 14 integrated units, 16 grinding units, 79 ready-mix concrete plants and over 78,000 channel partners across India.
The Board of Ambuja Cements approved an infusion of Rs 20,000 crore into Ambuja by way of preferential allotment of warrants. This will equip Ambuja to capture the growth in the market. The actions will significantly accelerate value creation for all stakeholders, in line with the Adani Group’s business philosophy.
Both Ambuja Cements and ACC will benefit from synergies with the integrated Adani infrastructure platform, especially in the areas of raw material, renewable power and logistics, where Adani Portfolio companies have vast experience and deep expertise.
Ambuja and ACC will also benefit from Adani’s focus on ESG, circular economy and capital management philosophy. The businesses will continue to be deeply aligned to UN Sustainability Development Goals (SDG) with clear focus on SDG 6 (clean water and sanitation), SDG 7 (affordable and clean energy), SDG 11 (sustainable cities and communities) and SDG 13 (climate action).
In line with the Adani Portfolio’s governance philosophy, the board committees of both Ambuja Cements and ACC have been reconstituted. The audit committee and the nomination and remuneration committee now comprise 100 per cent independent directors.
Further, two new committees have been constituted the Corporate Responsibility Committee and the Public Consumer Committee both comprising 100 per cent independent directors to provide assurance to the board on ESG commitments and maximise consumer satisfaction. Also, a Commodity Price Committee has been constituted, comprising 50 per cent independent directors, to strengthen risk management.
The transaction was financed by facilities aggregating to $4.50 billion availed from 14 international banks.