Adani likely to launch nearly INR 31,000 cr open offer for ACC, Ambuja next week

The Indian listed subsidiaries of Swiss company Holcim, ACC, and Ambuja Cements, are expected to receive an open offer from Adani Group the following week for the purchase of a 26% stake. In the event that the open offer is fully subscribed, Adani will pay close to $31,000 crore. The open offer received approval from market watchdog Sebi earlier this week.

The letters of the open offer have been posted on stock exchanges by both Ambuja Cements and ACC. A cash offer to purchase 4,89,56,419 fully paid-up equity shares with a face value of $10 each at a price of $2,300 per equity share, representing a 26% stake in ACC, is described in the regulatory filing.

A cash offer is made to Ambuja Cement to purchase 51,63,52,655 equity shares with a face value of $2 each for $385, which represents 26% of the equity. Nevertheless, the cash offer for ACC and Ambuja Cement is valued at approximately 11,259.97 crore and 19,879.57 crore, respectively.

The open offer will begin on August 26 instead of July 6, according to a PTI report. As of September 9, 2022, this will be over. The open offer has been made by Endeavour Trade and Investment. Acropolis Trade and Investment is the company’s promoter, and some Adani family members are its stockholders. The open offer’s managers are Deutsche Equities India and ICICI Securities.

Adani and Holcim entered into formal agreements in May of this year to buy out the Swiss company’s entire stake in Ambuja Cements and ACC, two of India’s top cement producers. Through its subsidiaries, Holcim owns 54.53% of ACC (of which 50.05% is held through Ambuja Cements) and 63.19% of Ambuja Cements.

The open offer consideration and Holcim’s stake in Ambuja Cements and ACC are valued at about $10.5 billion, making this the largest acquisition by Adani and the largest M&A deal in India’s history for infrastructure and materials.

The installed production capacity of Ambuja Cements and ACC is currently around 70 MTPA. With a vast depth of manufacturing and supply chain infrastructure, the two businesses rank among the strongest in India. They have 23 cement plants, 14 grinding stations, 80 ready-mix concrete plants, and more than 50,000 channel partners spread out across the country.

Additionally, Ambuja and ACC employ 10,700 people across 31 cement manufacturing facilities and 78 ready-mix concrete plants in India. Both ACC and Ambuja Cement are publicly traded businesses on the Mumbai stock exchange. It is anticipated that the transaction will close in the second half of 2022, subject to local authorities’ approval.