The Adani Group has officially acquired a controlling stake in Holcim AG's cement businesses in India in a deal worth $10.5 billion and has become the second-biggest cement producer in the country, the Adani Group announced in an official release on May 15.
The richest person in Asia, Gautam Adani's conglomerate, obtained 63.19 per cent of Ambuja Cements Ltd and its subsidiary ACC in an assertive bidding war with other local companies.
Carbon-Intensive Cement Manufacturing!
The divestment is the latest move by Holcim as it looks to bring down its reliance on cement production, an industrial process which produces high levels of carbon emissions and has thus deterred numerous environmentally-conscious investors, reported Mint.
In the past few years, the Switzerland-based company ramped up its measures to get out of carbon-intensive cement manufacturing. ACC and Ambuja have a collective capacity to manufacture a minimum of 70 million tonnes of cement every year, only second to UltraTech Cement- which has an annual capacity of 120 million tonnes.
Adani Group's Recent Market Dominance
Through an offshore special purpose vehicle, the Adani family had entered into definitive agreements for the acquisition of Holcim Ltd's entire stake in Ambuja and ACC, the Adani Group stated in their official release.
Meanwhile, Holcim also announced that it had penned a binding agreement for the Adani Group to acquire Holcim's business in India, which comprises its stake in Ambuja Cement, which owns a 50.05 per cent interest in ACC, also a 4.48 per cent direct stake in ACC. Furthermore, Holcim is also set to receive approximately $6.4 billion for the stakes.
The Adani Group also announced that it would be acquiring even more shares through an open offer. The entire transaction is set to close in the second half of the year.
Adani Enterprises Ltd, the group's flagship firm, has two cement subsidiaries already. Adani Cementation Ltd now aims to construct an integrated facility in the Maharastra states and in western Gujarat, as per an official in the Adani group.
Ambuja Cement has a total of 14 cement plants that employ approximately 4,700 people. Meanwhile, ACC has 17 cement plants, 78 ready mix concrete factories and nearly 6,000 employees.
Official sources have suggested that this new deal was the most significant divestment since Holcim merged with French rival Lafarge back in 2015.
Since then, the company has sold many fringe parts of its business as it looked to concentrate on Europe and North America. In 2021, the company had sold its Brazilian operation for $1.025 billion, and it also exited the Indonesia and Philippines.