Adani Group’s Ambuja Cements to Acquire Majority Stake in Orient Cement
The Adani group’s Ambuja Cements has announced its third acquisition of the financial year. With a binding agreement in place, Ambuja Cements will acquire a 46.8% stake in Orient Cement Limited (OCL), owned by the C K Birla family, for an equity value of Rs 810 billion. This acquisition will not only strengthen Ambuja Cements’ presence in the cement industry but also expand the Adani group’s overall cement capacity.
Significant Push for Ambuja Cements
The deal with Orient Cement Limited will push Ambuja Cements’ cement capacity to 97.4 million tonnes per annum (mtpa). While this places Ambuja Cements as a major player in the industry, it still falls behind UltraTech Cement, which currently has a capacity of 150.7 mtpa.
An Open Offer Decision
To comply with market regulations, Ambuja Cements will initiate an open offer to acquire shares from the public shareholders of Orient Cement Limited. The offer is set at a price of Rs 395.40 per share. Under the share purchase agreement, Ambuja Cements plans to acquire 37.90% from OCL’s promoters and 8.90% from other shareholders. Simultaneously, an additional 26% stake will be acquired through the open offer.
Orient Cement’s Current Trading and Closing Price
After the acquisition news broke, Orient Cement’s shares closed at Rs 343.40 per share, seeing a decline of 2.5% in Tuesday’s trade.
This aggressive acquisition strategy by Ambuja Cement not only illustrates the Adani group’s ambition to solidify its position in the cement industry but also highlights the potential growth opportunities in infrastructure and real estate sectors in India. The company’s determination to increase its cement capacity through these acquisitions positions it to benefit from the rapid growth in infrastructure development and construction projects across the country.
With its expanded resources, Ambuja Cements will be better equipped to fulfill the escalating demands of the construction and infrastructure sectors. As large-scale projects continue to take shape across India, this acquisition presents a promising future for Ambuja Cements in contributing to the nation’s developmental goals.
Overall, the acquisition of a majority stake in Orient Cement Limited reflects Ambuja Cements’ commitment to gaining market share and enhancing its competitive edge in the cement industry. With increased investment and capacity, Ambuja Cements is on track to solidify its position and play a significant role in meeting the country’s growing infrastructure needs.
