India’s Adani Group acquired a majority stake in Holcim AG’s cement businesses in India in a $10.5 billion deal to become the country’s second-biggest cement producer, the Adani Group said in a statement on Sunday.
The conglomerate of Asia’s wealthiest Gautam Adani acquired 63.19% of Ambuja Cements Ltd and its subsidiary ACC in a fierce bidding process involving local companies.
The divestiture is Holcim’s latest move to reduce its reliance on cement production, an industrial process that generates high carbon emissions and has therefore turned off many environmentally conscious investors.
In recent years, the Switzerland-based company has accelerated its efforts to phase out carbon-intensive cement production.
Ambuja and ACC have a combined capacity to produce at least 70 million tons of cement annually, followed by UltraTech Cement with a capacity of 120 million tons.
The Adani family has reached definitive agreements to acquire Holcim Ltd’s entire stake in Ambuja and ACC through an offshore special purpose vehicle, the Adani Group said in a statement.
Holcim said in a statement it has signed a binding agreement for Adani Group to acquire Holcim’s business in India, which includes its stake in Ambuja Cement, which owns a 50.05 percent stake in ACC, as well as its 4th .48% direct interest in ACC. Holcim would get nearly $6.4 billion for the shares.
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The Adani Group announced it would acquire more shares through an open offering.
According to Holcim, the transaction should be completed in the second half of 2022.
Adani Group’s flagship company, Adani Enterprises Ltd, has two cement subsidiaries. According to an Adani Group official, Adani Cementation Ltd plans to construct an integrated plant in the states of West Gujarat and Maharastra.
Ambuja Cement has 14 cement plants with 4,700 employees. ACC has 17 cement plants and 78 ready-mixed concrete plants and employs 6,000 people.
According to official sources, the latest deal was the biggest divestment since Holcim merged with French rival Lafarge in 2015.
Since then, the company has sold peripherals of its business to focus on North America and Europe.
Last year, the company sold its Brazilian operations for $1.025 billion and also exited the Philippines and Indonesia.