Adani Group to acquire Orient Cement

With this acquisition, Adani Cement will achieve a capacity of 100 million tonnes per year

• Pramod Thomas
• 22 October, 2024

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By: Pramod Thomas

BILLIONAIRE Gautam Adani-led Adani Group on Tuesday (22) said it will acquire CK Birla group firm Orient Cement at a valuation of Rs 81 billion (£740.69 million), as part of its expansion drive.

With this acquisition Adani Cement will achieve a capacity of 100 MT (million tonnes) per annum by end of this financial year 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 £740.69m.

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 104.22bn (£950m), 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 51.85 billion (£474.13m).

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.

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.”

Adani Group entered into the cement sector in September 2022 after acquiring controlling stakes in Ambuja Cement from Swiss firm Holcim. Ambuja Cements owns a 51 per cent stake in ACC Ltd.

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, which has a consolidated capacity of 152.7 MTPA.

(PTI)