Deal creates India’s second largest cement producer

By Andy Brown07 August 2023


Ambuja Cements, owned by Gautam Shantilal Adani, an Indian billionaire industrialist, has announced that it has acquired cement com­pany Sanghi Indus­tries in a US$600 million deal.

Adani’s Ambuja Cements, which his group bought last year from Switzer­land-based Holcim for US$10.5 billion, is acquir­ing 57% of the shares in Sanghi from its fam­ily own­ers, with the  com­pany val­ued at around US$600 million after tak­ing into account debt and liquid assets. The deal makes the company India’s second-biggest cement maker.

According to a report in the Financial Times, Adani is fund­ing the deal entirely through its own cash, as opposed to taking on debt to complete the deal. Sanghi has India’s largest plant for cement and clinker and pro­duces approximately 6 million tonnes of cement per year. 

“We are optim­istic about the acquis­i­tion by Ambuja Cements, recog­nising it as a mutu­ally bene­fi­cial oppor­tun­ity for both of the share­hold­ers,” said Ravi Sanghi, Sanghi Indus­tries’ chair and man­aging dir­ector.

India’s cement market is expected to increase due to Nar­en­dra Modi’s drive to improve infra­struc­ture.

Adani said it aimed to increase Sanghi’s pro­duc­tion to 15mn tonnes per year. Its cur­rent assets pro­duce 67.5mn tonnes a year, with a tar­get of 140mn tonnes by 2028.

The move marks the con­glom­er­ate’s return to acquis­i­tions fol­low­ing a report by US-based short seller Hinden­burg Research in Janu­ary. It accused Adani of fin­an­cial mis­con­duct and knocked approximately US$150 billion off the group’s total stock mar­ket value. Adani strongly denies the claims and its shares have recovered much of their losses.

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