Ambuja Cements Acquires 47% Stake in Orient Cement
A big deal in India's cement industry, Ambuja Cements, a part of the diversified Adani Group said that it would buy 46.8% stake in Orient Cement Ltd (OCL) in an all-equity deal for an equity value of Rs 8,100 crore. Ambuja will be funding the entire amount through internal accruals. The acquisition would add to the cement footprint already existing in the country and help improve logistic efficiencies.
Ambuja Cements' Director, Karan Adani said, "This timed acquisition marks another significant step forward in Ambuja Cements' accelerated growth journey, increasing cement capacity by 30 million tonnes per annum (MTPA) within two years of Ambuja's acquisition". With this, Ambuja aims to achieve a total cement capacity of 100 MTPA by FY25, thereby expanding its presence in core markets and boosting its market share by an estimated 2%.
Orient Cement stands tall in terms of the operational capabilities. Currently it has a clinker capacity of 5.6 MTPA and a cement capacity of 8.5 MTPA. In addition to that, statutory approvals are also in place for another 6.0 MTPA clinker capacity and cement capacity of 8.1 MTPA. In addition to this, OCL has a limestone mine in Chittorgarh, North India, wherein an Integrated Unit (IU) of 4 MTPA clinker capacity and a split Grinding Unit (GU) of 6 MTPA are proposed.
Karan Adani emphasized the strengths of OCL's assets, railway sidings and captive power plants supported by renewable energy and AFR facilities. He added, "OCL's strategic locations, with high-quality limestone reserves and requisite statutory approvals, present an opportunity for increasing cement capacity in the near term to 16.6 MTPA".
We are confident that the Adani Group, with a great focus on cement and infrastructure, is an ideal new owner to ensure further growth for the benefit of our people and stakeholders", added CK Birla, Chairman of Orient Cement and CK Birla Group.
With this acquisition, Ambuja Cements, along with its subsidiaries ACC Ltd, Penna Cement Industries Ltd, and Sanghi Industries Ltd will add up its total cement capacity to 88.9 MTPA. Currently, the group operates 20 integrated cement manufacturing plants, 20 cement grinding units, and 12 bulk terminals in India.