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Wednesday, March 29, 2023

Adani Lines up Financing, Frontrunner for Holcim India’s Assets Worth $10 billion

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The Adani Group has finalised its financing for $10 billion acquisition of Holcim’s India assets — ACC and Ambuja — making them a frontrunner to take over the 66 MTPA assets in India the economic times is reporting.

Global banks Barclays, Deutsche Bank along with Indian banks like ICICI and Axis are believed to be helping the Ahmedabad-based conglomerate.

One of the sources said both sides have initiated final stages of negotiations before signing an deal exclusivity.

There is still no guarantee if the deal will go through or get shareholder approvals. No final decisions have been made as yet. It is also not clear if both sides have signed any deal exclusivity.

Aditya Birla Group’s UltraTech is the largest cement company in India with a capacity of 117 MTPA.

Switzerland-based Holcim that globally merged with French rival Lafarge in 2015 to create a mega entity LafargeHolcim – a European cement and buildings material giant — was forced to go through several restructurings to comply with anti-trust regulators around the world, by divesting assets across Europe and Asia, including India.

The combined entity has since been rebranded as Holcim Group.

Holcim’s flagship entity in India is Ambuja Cement where, as promoters, it owns 63.1% via Holderind Investments Limited. Ambuja Cement in turn owns 50.05% of ACC Ltd. Holderind Investment (Holcim) owns another 4.48% in ACC directly.

Since 2018, Holcim has tried to streamline operations by merging the two operations for maximum cost and operational efficiencies, but that process is still incomplete.

As on Wednesday, the combined market capitalisation of the two companies is Rs 1.14 lakh crore ($15 billion) with Ambuja alone being at Rs 73,349 crore ($9.7 billion), making it arguably one of the largest potential M&As in India.

Any potential transaction will also trigger an open offer in both for an acquisition of an additional 26%.

MoneyCentral reported last week that If Dangote Cement was in the bidding for Holcim’s Ambuja cement assets it could help it revive its now stalled its Asian expansion plans.

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