Holcim’s plan to exit the market comes as it plans to diversify from its core business of cement and aggregates to focus more on building technology amid enhances the emphasis on sustainability.

Adani group is on a shopping spree it seems and it took Gautam Adani $10.8 billion to bring home Holcim’s Ambuja and ACC home. The group announced its largest acquisition so far on Sunday.


Last month, the world’s largest cement maker Holcim announced its exit from the country as part of its ongoing sale of non-core assets. The company through two listed entities ACC and Ambuja has 66 million tonnes per annum capacity (MTPA).

The group entered the market 17 years ago and the exit will put its listed arms, Ambuja and ACC, up for sale. Holcim holds a 63.19 percent stake in Ambuja and a 4.48 percent in ACC while Ambuja owns a 50.05 percent stake in ACC. Holcim’s exit is part of the group’s ‘strategy 2025’ that aims for sustainable solutions for the building materials sector. The significance of cement in the overall group is already declining compared to ready mix concrete, aggregates, roofing, and green building solutions.

Ambuja cement, a publicly traded firm, is a market leader in India’s cement industry with an annual production capacity of 31 million metric tonnes from its six integrated manufacturing plants and eight cement grinding units. ACC Ltd, which is also a publicly traded firm, is a subsidiary of Ambuja.

Adani-: Adani Group was always ahead in the race to acquire Ambuja Cements Ltd and ACC Ltd, the India arms of Switzerland-based Holcim, with a war chest of USD 13.5 billion for the deal. The Gautam Adani-led firm approached Sheikh Tahnoon bin Zayed Al Nahyan of the United Arab Emirates’ ruling family and other investment groups in the Middle East to raise funds for the acquisition of Ambuja and ACC cement companies.

The Adani group planned a unique acquisition and financing structure for the buyout of the two cement companies. Adani group floated a off-shore based group entity as the principal vehicle for the transaction by capitalizing an SPV under it.

“The value for the Holcim stake and open offer consideration for Ambuja Cements and ACC is USD 10.5 billion, which makes this the largest ever acquisition by Adani, and India’s largest-ever M&A transaction in the infrastructure and materials space,” the Adanis said in a statement. 

This deal makes the Adanis the second-largest cement player, after the UltraTech Cement of the Aditya Birla Group.

 “Our move into the cement business is yet another validation of our belief in our nation’s growth story,” Gautam Adani, chairman of the Adani Group, said. “Not only is India expected to remain one of the world’s largest demand-driven economies for several decades, but 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,” he said.

 “In statistical comparison, China’s cement consumption is over seven times that of India’s. When these factors are combined with the several adjacencies of our existing businesses including 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,” he added.

“I am delighted that the Adani Group is acquiring our business in India to lead its next era of growth,” Jan Jenisch, CEO of Holcim Limited, said in a statement.

The Adani Group may sign an agreement to acquire a controlling stake in Ambuja Cements from Holcim as soon as in the coming days, it said. The group led by the richest Indian, Gautam Adani, has been planning to enter the cement business for a long. It is already setting up two cement units at Dahej in Gujarat and Raigarh in Maharashtra and aspires to be a leading one in the segment, sources said. That’s why Holcim’s purchase becomes crucial for the Adani group.

Other interested buyers included-:

Aditya Birla group-: The Aditya Birla Group, which owns the country’s largest cement company Ultratech, was also in the race to buy out the Swiss cement giant Holcim’s stake in Ambuja Cement and ACC.

Ultratech by far is the largest cement maker in the country with an installed capacity of 117 mt giving it around 25 percent of the little over 500 MT domestic cement market, and if the deal had gone through it would have divested 10-15 MT of Holcim’s capacity to meet the CII norms.

Ultratech is cash-rich and could have easily raised debt for the buyout. As of the December quarter, its debt to equity stood at a low of 0.32x.  In the past, it acquired assets of rivals such as Jaypee group cement assets, Binani Cement, and the cement business of Century Textiles.

The Birla Group would have gotten a huge control of the industry if its bid were to go through. Therefore, it had opted to pitch for a deal hoping it will make the cut with the Competition Commission.

Jindal group-: The JSW Group, which is already present in the sector was also reportedly in the race for the prized assets. Sources quoted the chairman of JSW group Sajjan Jindal saying Holcim is also in discussion with steel-to-energy conglomerate and had reported that it will make a $7 billion bid for Holcim’s India subsidiaries. JSW would have offered $4.5 billion in its own equity and $2.5 billion from undisclosed private equity partners for Holcim’s Indian assets Ambuja Cement and ACC, the report had said.

According to analysts at Nirmal Bang Institutional Securities, “We believe that these assets (Ambuja and ACC) will command a significant premium given the quality of brands, country-wide reach, and large capacities. At current valuation, we do not see too much upside for Ambuja, but in case of corporate action taking place, aggressive bidding and possible aggressive growth over the next 10 years will make this company attractive again,”.