Adani Group to buy Orient Cement for Rs 8.1k cr

PTI New Delhi: Adani Group on Tuesday said it has agreed to acquire CK Birla group firm Orient Cement Ltd in a deal valued at Rs 8,100 crore, as billionaire Gautam Adani-run conglomerate snaps up smaller rivals to challenge India's top cement maker UltraTech. Ambuja Cement, India's No.2 cement maker, will buy 46.8% of its founders including chairman CK Birla, and certain public shareholders for Rs 3,791 crore. This would trigger an open offer for an additional 26% stake in Orient, according to a company statement. Orient, which has two cement plants in the south and one in western India, will be Ambuja's second acquisition this year. It will add 8.5 million tonnes to take Ambuja's operational capacity to 97.4 million tonnes.

The Adani group has plans in the works to raise this to 140 million tonnes a year by 2028, just a shade below market leader UltraTech's current capacity of 149.5 million tonnes (154.9 million tonnes after including overseas plans). While Adani group snapped Hyderabad-based Penna Cement for Rs 10,422 crore in June this year and had acquired Saurashtra-based Sanghi Industries Ltd for Rs 5,185 crore in December last year, Aditya Birla group flagship UltraTech Cement had in July bought India Cements for Rs 3,945 crore. Ambuja said it would pay Rs 3 9 5 . 4 0 p e r share for Orient, which will add 2% to its market share. Besides 8.5 million tonnes per annum of operational capacity, near debt-free Orient has another 8.1 million tonnes of ready-to-execute projects. Plus, a high-quality limestone mine at Chittorgarh in Rajasthan can support an additional 6 million tonnes of cement capacity. In the statement, Ambuja Cements, the cement and building material company of Adani Cement and part of the diversified Adani Group, announced the signing of a binding agreement for the acquisition of Orient Cement Ltd (OCL) at an equity value of Rs 8,100 crore.

The acquisition will be fully funded through internal accruals. "This timed acquisition marks another significant step forward in Ambuja Cements' accelerated growth journey, increasing cement capacity by 30 million tonnes per annum within two years of Ambuja's acquisition," said Karan Adani, Director of Ambuja Cements.