Ambuja Cements Ltd, a subsidiary of the Adani Group, has announced plans to acquire a 46.8 percent share in Orient Cement Ltd for Rs 8,100 crore. The transaction would be carried out by purchasing shares from Orient Cement's proprietors and some public shareholders for Rs 395.4 per share.
According to a stock exchange filing, Ambuja Cements will purchase 37.9 percent of Orient Cement from its promoters and an additional 8.9 percent from certain public shareholders. Following this, Ambuja intends to make an open offer for 26% of Orient Cement's increased share capital at the same price per share.
This acquisition will increase Ambuja's cement capacity to 16.6 million tonnes per annum (MTPA), including the 8.5 MTPA that is currently operational. The agreement moves Ambuja closer to meeting its ambition of exceeding 100 MTPA of cement capacity by FY25, with a longer-term goal of reaching 140 MTPA by 2028. It also gives Ambuja with a future capacity growth of 6 MTPA in North India owing to Orient Cement's limestone assets in Rajasthan.
Ambuja will pay the acquisition exclusively through internal accruals, ensuring its debt-free status. Orient Cement's strategic assets, including operational factories in Telangana, Karnataka, and Maharashtra, will supplement Ambuja's current footprint, lowering logistics costs and increasing overall market share by 2% across India.
Karan Adani, Director of Ambuja Cements, stated that this acquisition is part of the company's fast growth strategy, adding, "By acquiring Orient Cement, Ambuja is well-positioned to reach 100 MTPA cement capacity in FY25."
CK Birla, Orient Cement's promoter, stated that the group's objective is to reallocate capital to focus on consumer-centric and technology-driven industries, while Amita Birla voiced confidence in the transaction's long-term advantages for employees and stakeholders.
