On Tuesday, 22 October 2024, Ahmedabad: The Adani Group, through its subsidiary Ambuja Cements, acquired Orient Cement from the CK Birla Group in a landmark deal valued at approximately ₹8,100 crore. This acquisition, which grants Adani a 46.8% stake in Orient Cement, aims to further the group’s ambition of surpassing 100 million tonnes per annum (MTPA) of cement capacity by the end of the 2025 fiscal year. This goal aligns with Adani's broader vision of establishing a dominant presence in India's infrastructure sector by expanding its cement production capacity and distribution footprint in Southern and Western India.
Orient Cement's established market presence, along with its production facilities and distribution network, provides a strategic advantage for Adani. The acquisition enables Adani to leverage synergies across its infrastructure, logistics, and renewable energy operations, promoting a sustainable supply chain while meeting India's growing infrastructure demands. With this deal, Adani cements its competitive stance in the industry, particularly against top players like UltraTech Cement, and strengthens its role in supporting India's extensive infrastructure initiatives, including roads, housing, and renewable energy projects
Ambuja Cements will launch an open offer to the public shareholders of OCL which would be priced at Rs 395.40 per share. This is done in order to comply with market requirements. According to the statement, the business intends to acquire 37.90 percent of OCL from its promoters and another 8.90 percent from other shareholders in accordance with the share purchase agreement. A further 26 percent ownership in the enhanced share capital in accordance with the open offer is also included.
Across the southern and western regions of India, Orient Cement has a clinker capacity of 5.6 million tons per annum and a cement capacity of 8.5 million tons per annum. In addition, OCL possesses 8.1 million tons per annum of capacity in a "ready to execute" phase, which Ambuja claims can be completed in a short amount of time. Additionally, the company has access to high-quality limestone mines in Rajasthan.
Within the context of a presentation, Ambuja Cements anticipated that the investment will result in a return on capital employed (ROCE) of more than fifteen percent. The director of Ambuja Cements, Karan Adani, referred to the acquisition as "another significant step forward in Ambuja Cements' accelerated growth journey." According to Adani, the acquisition will increase cement capacity by thirty million metric tons per annum within two years of Ambuja's takeover.
