Shares of ACC and Ambuja Cements jumped up to 7% in opening deals on Monday after their parent company Holcim signed a deal with billionaire Gautam Adani-led Adani Group to sell its entire stake in the two leading cement companies of the country. The Adani family, through an offshore special purpose vehicle (SPV), has entered into definitive agreements for the acquisition of Switzerland-based Holcim’s stake in Ambuja Cements and ACC in a $10.5 billion deal. Holcim, through its subsidiaries, owns 63.19% shares in Ambuja Cements and 54.53% in ACC (of which 50.05% is held through Ambuja Cements).
Bolstered by the development, shares of ACC opened higher at ₹2,149 against the previous closing price of ₹2,113.70 on the BSE. In the first hour of trade so far, the largecap stock gained as much as 7.16% to hit a high of ₹2,265 amid strong volume. As many as 0.6 lakh shares changed hands over the counter as compared to two-week average volume of 0.35 lakh stocks. The market capitalisation of the cement major surged to ₹41,846.51 crore.
Similarly, Ambuja cements rose 3.5% to touch a high of ₹371.4 in early deals on the BSE. The stock opened at ₹370, up 3.12% against Friday’s closing price of ₹358.80. On the volume front, 4.97 lakh shares worth ₹18.15 crore changed hands over the counter on the BSE, as against two-week average volume of 3.33 lakh scrips.
Meanwhile, the BSE Sensex was trading 600 points higher at 53,394 levels.
Adani group on Sunday announced that it has inked a pact to acquire ACC and Ambuja Cements in the largest- ever acquisition deal in India’s infra and materials space. With this, Adani is now India’s second-largest cement manufacturer after the Aditya Birla Group-owned UltraTech Cement. The acquisition is subject to regulatory approvals and conditions.
Ambuja Cements and ACC currently have a combined installed production capacity of around 70 metric tonnes per annum (MTPA). The two companies are among the strongest brands in India with immense depth of manufacturing and supply chain infrastructure, represented by their 23 cement plants, 14 grinding stations, 80 ready-mix concrete plants and over 50,000 channel partners across India.
Both Ambuja 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, the Adani group said in a release.
Commenting on the mega-deal, Gautam Adani, Chairman of the Adani Group, says “Our move into the cement business is yet another validation of our belief in our nation's growth story."
"Not only is India expected to remain one of the world's largest demand-driven economies for several decades, India also continues to be the world's second-largest cement market and yet has less than half of the global average per capita cement consumption. In statistical comparison, China’s cement consumption is over 7x that of India’s. When these factors are combined with the several adjacencies of our existing businesses that include the Adani Group's ports and logistics business, energy business, and real estate business, we believe that we will be able to build a uniquely integrated and differentiated business model and set ourselves up for significant capacity expansion,” says Adani.