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Adani forges $10.5-billion deal with Holcim India to buy Ambuja Cement, ACC

Other News Materials 16 May 2022 11:00
Adani forges $10.5-billion deal with Holcim India to buy Ambuja Cement, ACC

Swiss building-materials firm Holcim Ltd. agreed to sell its Indian operations to local billionaire Gautam Adani, currently the richest person in Asia, another step in Chief Executive Officer Jan Jenisch’s pivot away from traditional cement.

The company will sell its 63% stake in Mumbai-listed Ambuja Cements Ltd. to Adani Group, it said in a statement Sunday. Adani said it plans to spend about $10.5 billion on the stake purchases and open offer consideration for Ambuja and related entities.

As part of the deal, Adani will inherit Ambuja’s controlling stake in another publicly traded cement producer, ACC Ltd., and buy Holcim’s direct 4.5% holding in the unit. Holcim expects to receive 6.4 billion Swiss francs ($6.4 billion) of cash proceeds from the sale, according to the statement.

“We have quite a list of businesses we would like to acquire, so I think we can put this money here very well to use,” Jenisch said in an interview on Sunday. “At the moment, we’re working on more than 10 deals.”

Jenisch, who joined Holcim in 2017 from Sika AG, has been selling non-core cement businesses and buying new construction companies to benefit from rising demand for energy efficient buildings. As part of the strategy to expand the so-called solutions and products division, he has spent about $5 billion for acquisitions including Malarkey Roofing Products in December and Firestone Building Products in early 2021.

The 55-year-old German, has been cleaning up the company after the messy mega merger of Holcim and France’s Lafarge SA in 2015. Jenisch divested a Brazilian unit for $1 billion in September and Asian businesses such as Holcim Indonesia in 2019.

Holcim’s sale of its Indian business — which is subject to local regulatory approvals — is expected to close in the second half of 2022, helped by the fact that Adani doesn’t have sizable overlap. The company began reviewing new asset sales over the last year after the roofing acquisitions, and concluded negotiations with a handful of potential Indian buyers in about three months, Jenisch said

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