Holcim in share purchase talks with Adani, JSW groups for Ambuja Cements, ACC: report
12 May 2022
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The Holcim Group is reported to have initiated negotiations on a detailed share purchase agreement (SPA) with two Indian contenders – the Adani Group and the JSW Group – as part of the near $10 billion sale of listed Ambuja Cement and ACC.
Holcim is yet to hold any talks with the third likely contender, UltraTech, though the Kumarmangalam Birla group company is very much in the fray despite anti-trust worries, say reports.
The SPA talks are expected to be completed by end May, within which all suitors are expected to furnish full details of financing.
"Once the terms of the SPA are finalised, then there will be a short window to show up with the committed financing," said one of the persons. "At that point, whoever can move in first scalps the assets."
Cyril Amarchand Mangaldas is said to be advising Adani and Shardul Amarchand Mangaldas is working with the Birla Group while Khaitan & Co are legal advisors to the JSW Group.
The stocks of Ambuja and ACC have been extremely volatile since the sale reports emerged. The combined market value of Ambuja Cement and ACC was Rs 1.14 lakh crore on Monday.
UltraTech is still weighing options qs a bid by UltraTech will face scrutiny from India’s anti-trust watchdog, the Competition Commission of India (CCI). Ultratech currently accounts for 117 MTPA of the total 540 million tonnes per annum (MTPA) of capacity in the country. ACC and Ambuja together have 66 MTPA capacity.
Ultratech is also reported to be looking at options of joining forces with other contenders, sharing 25-30 MTPA of the new capacity.
An ET report, meanwhile, said that the Adani Group was looking at a Dubai-based group as the main vehicle for the buyout of the twin cement targets and has been in talks with Gulf investors, including IHC that recently invested $2 billion in the group. The infrastructure major is also reported to be finalising terms of promoter as well as share-backed financing from Barclays, Standard Chartered Bank and Deutsche Bank.
JSW Group, on the other hand, is relying on its own strength and bankroll nearly $2 billion as its equity, while raising nearly $1.75 billion in funding from a consortium including Carlyle, CVC, Advent and Oaktree Capital, say reports.
Holcim is keen to add new construction businesses outside cement as it seeks to move out of polluting sectors. The company agreed to take over Malarkey Roofing Products in December and Firestone Building Products in early 2021. It has been selling non-core assets to reduce debt and diversify through acquisitions. It sold its Brazilian unit for $1 billion last September and is also planning to cash out of its Zimbabwe operations.
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