Cement Giants Clash: Ambuja Acquires Rs 8100 Cr Orient Cement Stake

Ambuja Acquires Orient Cement Stake

Ambuja Cements, part of the Adani Group, has announced its acquisition of a 46.8% stake in Orient Cement Ltd for Rs 8,100 crore. The transaction involves purchasing shares from Orient Cement’s promoters and select public shareholders at a price of Rs 395.4 per share.

The acquisition will take place in two phases: initially, Ambuja will acquire 37.9% from the promoters, followed by an 8.9% acquisition from specific public shareholders, as outlined in a stock exchange filing. Additionally, Ambuja plans to launch an open offer for 26% of Orient Cement’s expanded share capital at the same price per share. This deal is expected to increase Ambuja’s cement capacity by 16.6 million tonnes per annum (MTPA), comprising 8.5 MTPA currently operational and 8.1 MTPA under development.

Cement Giants Clash: Ambuja Acquires Rs 8100 Cr Cyril Amarchand Mangaldas acted as legal counsel for Ambuja Cements during this transaction, with guidance from Managing Partner Cyril Shroff and Senior Partner L. Viswanathan. Partner Ruetveij Pandya led the team, supported by Principal Associate Abhilasha Malpani and Associate Disha Tulsyan.

Paridhi Adani and Smruti Shah contributed insights on key transaction aspects, while the Competition Law advisory team was led by Partner Avaantika Kakkar and Principal Associate Aman Baroka.

Expertise in mining and electricity was provided by Partners Ramanuj Kumar and Nishikant Sao, and real estate insights came from Partner Abhilash Pillai. Due diligence support was offered by Principal Associate Viraj Gami, with Associate Tanvi Apte assisting in transaction support.

Khaitan & Co advised the controlling shareholders of Orient Cement regarding their equity share sale to Ambuja Cements, with a core team that included Partner Abhishek Dadoo, Counsel Gaurav Malhotra, and Principal Associate Jayantika Khanna. They received strategic advice from Senior Partner Haigreve Khaitan, and support on competition law from Partner Anshuman Sakle, as well as tax advice from Partner Sanjay Sanghvi and Counsel Raghav Kumar Bajaj. Intellectual property aspects were handled by Partner Shailendra Bhandare.

Cement Giants Clash: Ambuja Acquires Rs 8100 Cr India’s cement sector is experiencing a surge in mergers and acquisitions, highlighted by Ambuja Cements’ announcement of its plan to acquire a 47% stake in Orient Cement for $451 million. This transaction is part of a trend of significant deals in the industry, fueled by intense competition between Gautam Adani’s conglomerate and UltraTech Cement, both looking to leverage expected infrastructure spending.

Timeline of notable deals since Adani entered the market in 2022:

– Ambuja Cements and ACC Acquisition: Adani made a significant move by acquiring Ambuja Cements and ACC from Swiss company Holcim for $10.5 billion, marking the largest cement deal in India.

– Dalmia Bharat-Jaiprakash Associates (Dec 2022): Dalmia Bharat expanded its footprint in central India by purchasing assets from Jaiprakash Associates for $687 million.

– Sagar Cements-Andhra Cements (Feb 2023): Sagar Cements successfully bid $9.2 billion to take over Andhra Cements, with the deal receiving tribunal approval.

– Ambuja Cements-Sanghi Industries (Aug 2023): Following the Hindenburg report, Ambuja Cements made its first major move by acquiring an 83% stake in Sanghi Industries for $295 million.

– UltraTech Cement-Kesoram Industries (Nov 2023): UltraTech strengthened its presence in southern India by acquiring Kesoram Industries’ cement assets for $645 million.

– Ambuja Cements-Penna Cement Industries (June 2024): Ambuja completed a $1.25 billion takeover of Penna Cement, positioning itself as a potential top-three player in southern India. In a related move, UltraTech expanded its holdings further with a $472 million deal to gain control of India Cements, building on an earlier stake purchase of 23% for $228 million.