Gautam Adani, who entered the cement business through the acquisition of ACC and Ambuja from Holcim back in 2022, has added Orient Cement to his kitty amid a high stakes battle for sector leadership between the Adani Group and Kumar Mangalam Birla-led Aditya Birla Group.
Ambuja Cements has signed a binding agreement for the acquisition of Orient Cement (OCL) at an equity value of Rs 8,100 crore. Ambuja will acquire 46.8 per cent shares of OCL from its current promoters (CK Birla Group) and certain public shareholders.
"This timed acquisition marks another significant step forward in Ambuja Cements’ accelerated growth journey, increasing cement capacity by 30 million tons per annum (MTPA) within two years of Ambuja’s acquisition,” said Karan Adani, director of Ambuja Cements.
By acquiring OCL, Ambuja is poised to reach 100 MTPA cement capacity in the current financial year noted Adani.
"The acquisition will help to expand Adani Cement’s presence in core markets and improve its pan-India market share by 2 per cent," he added.
Earlier, Ambuja had acquired Penna Cement Industries.
CK Birla, the chairman of Orient Cement, pointed that the group is continuously reallocating capital as it looks to sharpen its focus on consumer centric, technology driven and service-based businesses.
OCL has 5.6 MTPA clinker capacity and 8.5 MTPA cement capacity along with statutory clearance to increase the clinker capacity by another 6.0 MTPA and cement capacity by another 8.1 MTPA. Additionally, OCL also has a limestone mining lease in Chittorgarh, Rajasthan for setting up an integrated unit (with clinker of 4 MTPA and a split grinding unit of 6 MTPA in North India.
The Aditya Birla Group, whose UltraTech is the market leader in the cement industry has also been strengthening its position. Earlier this year, UltraTech acquired a stake in India Cements.
In 2023, UltraTech had acquired the cement business of Kesoram Industries. With the acquisitions and it's own expansion, UltraTech's cement capacity will surpass 200 MTPA by financial year 2027, Chairman Kumar Mangalam Birla had said earlier this year at the company's annual general meeting.
Sajjan Jindal-led JSW Cement too has been exploring acquisitions to grow its cement and was also reportedly in the race to buy the Orient Cement stake.
JSW Cement had filed papers earlier this year to raise around Rs 4,000 crore via an initial public offering. The issue was put on hold by market regulator SEBI in September.
On Tuesday, Orient Cement shares were 2.3 per cent lower at Rs 344.25 on the BSE in noon trading. Ambuja Cements was down 1.6 per cent at Rs 563. UltraTech was up 0.6 per cent at Rs 10,938.95.