Adani acquires controlling stake in Holcim cement in India

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Adani acquires controlling stake in Holcim cement in India

The Adani group acquired a controlling stake in Holcim's cement businesses in India in a $10.5 billion deal in order to become the second largest cement producer in the country, the Adani group said on Sunday.

Asia's richest person Gautam Adani'sAdani's conglomerate acquired 63.19% of Ambuja Cements and its subsidiary ACC in fierce bidding with local companies.

Holcim is attempting to reduce its reliance on cement production, an industrial process that produces high levels of carbon emissions, which has deterred many environmentally conscious investors, which is why the divestment is the latest move by Holcim.

In recent years, the Switzerland-based company has accelerated its efforts to get out of carbon-intensive cement-making.

Ambuja and ACC have the combined capacity to produce 70 million tons of cement annually, second to UltraTech Cement, which has 120 million tons in capacity.

The Adani family, through an offshore special-purpose vehicle, had entered definitive agreements for the acquisition of Holcim's entire stake in Ambuja and ACC, the Adani group said in a statement.

Holcim said in a statement that it had signed a binding agreement for the Adani group to acquire Holcim's business in India, including its stake in Ambuja Cement, which has a 50.05% interest in ACC, as well as its 4.48% direct stake in ACC. Holcim would receive $6.4 billion for the stakes.

The Adani group said it would acquire more shares through an open offer.

The transaction is expected to close in the second half of 2022, Holcim said.

Adani Enterprises, the Adani group's flagship firm, has two cement subsidiaries. Adani Cementation plans to build an integrated facility in western Gujarat and Maharastra states, according to an official in the Adani group.

Ambuja Cement has 14 cement plants and employs 4,700 people. ACC employs 6,000 people and has 17 cement plants and 78 ready-mix concrete factories.

Officials said the deal was the biggest deal since Holcim merged with French rival Lafarge in 2015.

Since then, the company has been selling fringe parts of its business as it tries to concentrate on North America and Europe.

The Brazilian company sold its Brazilian operation for $1.025 billion last year, and it has also exited the Philippines and Indonesia.