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.