Holcim Ltd., a Swiss construction materials company, has decided to sell its Indian assets to Indian billionaire Gautam Adani, who is now Asia's wealthiest person, marking yet another milestone in CEO Jan Jenisch's shift from mainstream cement.
According to a statement released on Sunday, Holcim will sell its 63% ownership in Mumbai-listed Ambuja Cements Ltd. to the Adani company.
Adani has stated that it intends to spend approximately $10.5 billion on asset sales and open bid consideration for Ambuja and associated enterprises.
Adani will acquire Ambuja's controlling position in ACC Ltd., a publicly-traded cement company, and will purchase Holcim's direct 4.5% stake in the unit as part of an agreement. According to the statement, Holcim expects to collect $6.4 billion in cash from the transaction.
"We have a long list of companies we'd want to buy," Jenisch said in a Sunday interview. "We're now negotiating on more than 10 contracts."
Jenisch, who entered Holcim from Sika AG in 2017, has been selling non-core cement firms and purchasing new construction businesses to capitalize on the growing market for sustainable buildings.
He has spent roughly $5 billion on purchases, notably Firestone Building Products in early 2021 and Malarkey Roofing Products in December, as part of his ambition to grow the so-called systems and products sector.
After the disastrous massive integration of Holcim and France's Lafarge SA in 2015, the 55-year-old German has been cleaning up the firm. Jenisch sold a $1 billion Brazilian asset in September to Asian firms including Holcim Indonesia.
The sale of Holcim's Indian operation, which is subject to local regulatory requirements, is likely to close in the second half of 2022, aided by Adani's lack of significant overlap.
Following the roofing acquisitions, the company began looking for fresh asset sales during the previous year, and Jenisch claimed that negotiations with a number of possible Indian buyers took roughly three months.
As per Phillip Capital analyst Vaibhav Agarwal, the transaction will catapult Adani to become India's second-largest cement maker from a modest participant in the divided sector. According to individuals acquainted with the situation, the group beat out other local firms, including JSW Group.
According to a statement released on Sunday, Adani Group is proposing ₹385 per share for Ambuja Cements, a 7.2% premium over Friday's closing price. For ACC, it will pay ₹2,300 per share.
In early Monday trade in Mumbai, Ambuja Cements assets surged as high as 3.5%, while ACC rose as much as 7%.