Ambuja Cements, owned by the Adani Group, announced on Thursday that its board has approved the merger of Adani Cementation, now a subsidiary of Adani Enterprises. This merger, after regulatory and shareholder approvals, will result in Adani Cementation becoming a wholly-owned subsidiary of Ambuja Cements through a share swap deal. Adani Enterprises will receive 8.7 million shares of Ambuja Cements in exchange. The consolidation of cement capacities within the Adani Group is intended to enhance operational efficiency and strengthen Ambuja Cements’ presence along the coast. The merger scheme involves a SWAP ratio of 174 shares of Ambuja Cements Ltd for every 1 share of Adani Cementation Ltd (ACL). ACL, a wholly-owned subsidiary of Adani Enterprise Ltd, holds strategic locations near Dahej port and Amba River – Raigad, offering valuable synergy for Ambuja Cements. The strategic positioning will facilitate the sourcing of clinker via both sea and rail, effectively serving the high-growth markets of South Gujarat and Mumbai. Furthermore, ACL’s limestone resources will augment Ambuja’s consolidated limestone reserves. ACL has acquired land to establish a 2.5 MTPA (million tonnes per annum) cement plant with a captive jetty at Amba River, Raigad (Maharashtra). Additionally, ACL commissioned a 1.30 MTPA cement grinding capacity at Dahej, Gujarat in July 2023, with expansion plans underway for another 1.20 MTPA. The merger will also provide Ambuja Cements with a competitive advantage in serving the high-growth markets of South Gujarat through Dahej and the Mumbai market through Raigad, utilizing both sea logistics and rail. Gautam Adani-led Adani Group currently has an installed cement capacity of 79 MTPA. The group has ambitious plans to reach a capacity of 140 MTPA by 2028. Earlier this month, the group announced the acquisition of Hyderabad-based Penna Cement at an enterprise value of Rs 10,422 crore, adding 14 MTPA to its capacity and taking the total to 93 MTPA. In December 2022, the Adani Group completed the acquisition of Saurastra-based Sanghi Industries Ltd, at an enterprise value of Rs 5,185 crore. The Adani Group’s foray into the cement sector began in September 2022 when it acquired controlling stakes in Ambuja Cement from Swiss firm Holcim for USD 6.4 billion (approximately Rs 51,000 crore). Ambuja Cements owns a 51 per cent stake in ACC Ltd. Subsequently, the group launched a Rs 31,000 crore open offer to acquire an additional 26 per cent stake from public shareholders. According to data from the Cement Manufacturers Association, India has an installed cement capacity of 541 Metric Tonnes (MT). The Indian cement market is led by Aditya Birla group firm UltraTech Cement Ltd, which holds a consolidated capacity of 152.7 MTPA. (Except for the headline, this story has not been edited by DNA staff and is published from PTI).
Adani Group Consolidates Cement Operations: Ambuja Cements to Absorb Adani Cementation
