Adani on acquisition spree; In talks with Holcim to buy ACC, Ambuja

Gautam Adani led Adani group is in advanced talks with Switzerland-based building materials conglomerate Holcim to acquire its cement business. The billionaire's Adani Group may reach an agreement with Holcim to buy a majority interest in Ambuja Cements Ltd.

For funding, the corporate conglomerate has begun conversations with global lenders such as Deutsche Bank and Barclays, as well as domestic banks such as ICICI Bank and Axis Bank. For Holcim's cement operations in India, ACC and Ambuja Cement, the purchase would be worth around $10 billion.

ACC and Ambuja: Two big players in the Indian cement market

According to the Financial Express, Ambuja Cement has a market capitalisation of Rs 76,477.13 crore, while ACC has a market capitalisation of Rs 43,389.19 crore, bringing the total market valuation of the two businesses to Rs 1.20 trillion.

If signed, the agreement would be one of the country's largest. Ambuja Cement has an installed capacity of 31.45 million tonne per annum (mtpa) of cement, according to its annual report for FY21.

Around 80% of the company's sales come from the retail sector. ACC, for its part, has a cement manufacturing capacity of 34.45 mtpa, bringing the overall production capacity of these enterprises to 65.9 mtpa. The Adani Group, which has no experience in the cement industry, is rumoured to be looking into it.

With an estimated expenditure of Rs 1,000 crore, the group planned to build a 5 mtpa cement manufacturing facility in Maharashtra's Raigad district. Adani Cement's total production capacity would increase to 70.9 mtpa if it is successful in acquiring ACC and Ambuja.

Holcim, which has been selling off its non-core assets, was looking to sell its businesses in India including its stake in Ambuja Cement and is in talks with JSW Group and Adani Group. It holds a 63.1% stake in Ambuja and a 4.48% stake in ACC, while Ambuja Cement — Holcim's flagship entity in India — holds a 50.05% stake in ACC.