ACC Ltd has acquired the remaining 55% stake in Asian Concretes and Cement at an enterprise value of 775 crore rupees. With this buyout, the company will add 2.8 million to its existing production capacity, taking it to a total of 38.55 million tonne.
The acquisition has been completely funded by internal accruals and includes cash and equivalents of 35 crore rupees with at Asian Concretes.
ACC and Ambuja Cements – also referred to as Adani Cement – now have the capacity to produce 76.10 million tonne of cement each year, which it plans to increase to 140 million tonne by 2028.
While Asian Concretes has a 1.3 million tonne capacity in Nalagarh in Himachal Pradesh, its subsidiary Asian Fine Cements has a capacity of 1.5 million tonne in Rajpura in Punjab.
“With this acquisition, we are furthering our growth trajectory, enriching our portfolio, and continuing to accelerate our journey towards value creation for all our stakeholders,” Ajay Kapur, the chief executive officer and whole-time director of the company said.
ACC already has an existing tolling arrangement with the Nalagarh unit in Himachal Pradesh, and Rajpura’s plant will help in catering to customers in Himachal Pradesh, Haryana and Punjab, the company said. It has sufficient clinker to support the Rajpura plant, including future expansions.
India is the second largest producer and consumer of cement in the world, and proximity to the end users is critical given that it impacts profitability. Having Asian Concretes in its fold is seen helping Adani Cement strengthen its presence in the north India, a key market for cement consumption.
In 2022, the Adani group completed the buyout of ACC and Ambuja Cements from the Holcim group for $6.5 billion, the largest-ever acquisition by the company. Adani Cement is currently the second-largest producer of cement in the country after UltraTech Cement, and some of its recent acquisitions include a majority stake in Gujarat-based Sanghi Industries.
Source: Economic Times