Adani's Ambuja Cements Acquires Orient Cement for ₹8,100 Crore from CK Birla Group
Consolidating its position in the cement sector, Adani group’s Ambuja Cements on Tuesday announced the signing of a binding agreement for the acquisition of Orient Cement Ltd (OCL) at an equity value of Rs 8,100 crore from the CK Birla group.
The latest Adani move is set to intensify the competition between the Adanis and the Aditya Birla group for supremacy in the cement sector. UltraTech Cement of Aditya Birla group recently acquired 32.72 per cent stake in India Cement for Rs 3,945 crore from N Srinivasan and family. Both the groups were on an acquisition spree in the cement sector in the last three years.
Ambuja will acquire 46.8 per cent shares of OCL from its current promoters and certain public shareholders. The acquisition will be fully funded through internal accruals. While UltraTech was also in talks to buy OCL, the Adanis finally managed to clinch the deal.
“This timed acquisition marks another significant step forward in Ambuja Cements’ accelerated growth journey, increasing cement capacity by 30 MTPA within two years of Ambuja’s acquisition,” said Karan Adani, Director of Ambuja Cements.
By acquiring OCL, Ambuja is poised to reach 100 MTPA (million tonnes per annum) cement capacity in FY25. The acquisition will help to expand Adani Cement’s presence in core markets and improve its pan-India market share by 2 per cent, the Adani firm said.
Festive offer
On the other hand, UltraTech’s cement capacity is at 146 MTPA. While Orient Cement shares fell by 2.50 per cent, Ambuja Cements declined by 2.42 per cent on the bourses on Tuesday.
“OCL’s assets are highly efficient, equipped with railway sidings and well supported by captive power plants, renewable energy, WHRS and AFR facilities. OCL’s strategic locations, high-quality limestone reserves and requisite statutory approvals present an opportunity to increase cement capacity in the near term to 16.6 MTPA,” Adani said.
CK Birla, Chairman of Orient Cement and the CK Birla Group, said, “the CK Birla Group is continuously reallocating capital to sharpen its focus on consumer centric, technology driven and service-based businesses.”
OCL has 5.6 MTPA clinker capacity and 8.5 MTPA cement capacity along with statutory clearance to increase the clinker capacity by another 6.0 MTPA and cement capacity by another 8.1 MTPA. In addition, OCL also has a limestone mining lease in Chittorgarh for setting up an Integrated Unit (IU) with clinker of 4 MTPA and a split Grinding Unit (GU) of 6 MTPA in North India, it said.
It has also secured a concession from MPPGCL, Madhya Pradesh for setting up a Grinding Unit within the premises of Satpura Thermal Power Plant. Both these complement the Adani Group’s existing cement footprint, Ambuja Cement said.
OCL has recently commissioned a WHRS in Chittapur IU and is in the final stage of commissioning 16 MW solar in Chittapur and 3.7 MW solar in Jalgaon. “OCL’s existing dealers will move to Adani Cement’s market network, creating formidable synergies,” it said.
BIRLA VS ADANI IN CEMENT