Adani group-owned Ambuja-ACC and JK Lakshmi Cement are currently leading the race to acquire Ahmedabad-based Sanghi Cement, which is up for sale with an estimated enterprise value of Rs 6,000 crore according to a report by the Economic Times.
The two front-runners are expected to begin due diligence on Sanghi Cement soon, and if everything checks out, they will submit formal offers over the next two months.
Previously, Shree Cement, Nirma Group, and Dalmia Bharat had also shown interest in acquiring a controlling stake in Sanghi Cement. However, they are no longer in the running, according to the sources. Sanghi Cement is currently controlled by the family of Ravi Sanghi, the promoters of Sanghi Industries.
Adani Group, JK Lakshmi Cement and Sanghi Cement chose not to comment on these speculations, added ET. Dalmia and Nirma groups also refused to provide any statements. Shree Cement, however, confirmed that it has dropped out of the race to acquire Sanghi Cement.
Ambuja-ACC, JK Lakshmi Cement, and UltraTech are the top three cement players in Gujarat, the region from where Sanghi Cement generates a significant portion of its revenues.
The Adani family had acquired Ambuja-ACC from Switzerland’s Holcim in a $10.5 billion deal, including the cost of open offers in May of the previous year.
By the end of 2022, Ambuja-ACC combined reported consolidated sales of Rs 30,000 crore. It is the second-largest cement player in India, trailing only behind Aditya Birla Group-owned UltraTech. Both Ambuja-ACC are debt-free and have secured non-fund-based facilities from banks, such as bank guarantees and letters of credit.
JK Lakshmi Cement, part of the business group led by industrialist Bharat Hari Singhania. This year JK Cement will acquire Toshali Cements at a total cost of Rs 157 crore. JK Cement also witnessed a two-fold rise in profits at the end of December 2022 at Rs 137 crore.
Source: Business-Standard