New Delhi: Billionaire Gautam Adani-led Adani Group on Tuesday said it will acquire CK Birla group firm Orient Cement at a valuation of Rs 8,100 crore, as part of its expansion drive.
With this acquisition Adani Cement will achieve a capacity of 100 MT (million tones) per annum by end of FY25 and a gain of 2 per cent in the overall market share in the country.
Adani Cement has signed a binding agreement for the acquisition of Orient Cement Ltd (OCL) at an equity value of Rs. 8,100 crore.
As per that, its step down unit “Ambuja will acquire 46.8 per cent shares of OCL from its current promoters and certain public shareholders”, according to a joint statement.
The acquisition will be fully funded through internal accruals, it added.
The latest acquisition will add 16.6 MTPA capacity to the growth-hungry Adani group firm, which operates through Ambuja Cements in the sector.
Besides, this deal will also help Adani group, which is aspiring to have 140 MTPA capacity by FY28, reduce the overall logistics costs for the cement business and improve market share.
In June, Adani had announced the acquisition of Hyderabad-based Penna Cement at an enterprise value of Rs 10,422 crore, which added 14 MTPA capacity to the country’s second-largest cement manufacturer.
In December last year, it completed the acquisition of Saurashtra-based Sanghi Industries Ltd at an enterprise value of Rs 5,185 crore.
Commenting over the latest development Ambuja Cements Director Karan Adani said: “This timed acquisition marks another significant step forward in Ambuja Cements’ accelerated growth journey, increasing cement capacity by ~30 MTPA within two years of Ambuja’s acquisition.”
By acquiring OCL, Ambuja is poised to reach 100 MTPA cement capacity in FY25, he added.
“The acquisition will help to expand Adani Cement’s presence in core markets and improve its pan-India market share by 2 per cent,” Adani added.
OCL has 5.6 MTPA of clinker capacity and 8.5 MTPA of cement capacity along with the statutory clearance to increase the clinker capacity by another 6.0 MTPA and cement capacity by another 8.1 MTPA.
C K Birla, Chairman of Orient Cement and the CK Birla Group, said, “The CK Birla Group is continuously reallocating capital to sharpen its focus on consumer-centric, technology-driven and service-based businesses.”
“We are confident that the Adani Group, with its strong focus on cement and infrastructure, is the ideal new owner to drive continued growth at Orient Cement for our people and stakeholders,” he said.
Adani Group entered into the cement sector in September 2022 after acquiring controlling stakes in Ambuja Cement from Swiss firm Holcim for cash proceeds of USD 6.4 billion (about Rs 51,000 crore). Ambuja Cements owns a 51 per cent stake in ACC Ltd.
Later it also launched a Rs 31,000-crore open offer for the acquisition of 26 per cent additional stakes from public shareholders.
According to data from the Cement Manufacturers Association, the country has a total of 541 metric tonnes (MT) of installed cement capacity.
The Indian cement market is led by Aditya Birla group firm UltraTech Cement Ltd, which has a consolidated capacity of 152.7 MTPA.
PTI