MUMBAI: Gautam Adani-controlled Ambuja Cements will acquire a 47 per cent stake in Orient Cement from Chandra Kant Birla and his family for Rs 3,791 crore as it looks to topple UltraTech Cement, owned by Kumar Mangalam Birla, from the top position in the industry.
As part of the acquisition process, Ambuja — the number two player — will also make an open offer for an additional 26 per cent stake to Orient’s public shareholders, totalling Rs 2,112 crore in compliance with India’s takeover regulations.This acquisition will be Ambuja’s fifth since its takeover by Adani in Sept 2022, following the purchase of Hyderabad-based Penna Cement in June.
Orient, which had also reportedly attracted interest from UltraTech and Sajjan Jindal’s JSW Cement, operates two plants in Telangana and Karnataka, and one in Maharashtra. The deal will boost Ambuja’s cement capacity by 8.5 million tonnes, bringing its total capacity to 97 million tonnes, with a target of reaching 140 million tonnes by 2028. In comparison, UltraTech currently has a capacity of over 180 million tonnes and aims to reach 200 million tonnes by 2027.
The decision to sell Orient aligns with the C K Birla Group’s strategy of reallocating capital to prioritise certain businesses over others. The $3-billion conglomerate recently made moves to expand its presence in the healthcare sector by acquiring two fertility chains, BabyScience and ARMC, increasing its network to 50 clinics across the country. Additionally, in March, the group acquired Topline — a well-known pipes and fittings brand in East India — to strengthen its home and building materials portfolio. The CK Birla Group intends to focus on consumer, IT, home & building materials, and healthcare businesses as it aims to double its turnover to $6 billion within the next five years.
C K Birla, chairman of the C K Birla Group and whose grandfather was the brother of Kumar Mangalam Birla’s great grandfather, expressed confidence in the Adani Group’s ability to drive continued growth at Orient Cement, benefiting both its employees and stakeholders. “We are confident that the Adani Group, with its strong focus on cement and infrastructure, is the ideal new owner to drive continued growth at Orient Cement for our people and stakeholders,” said C K Birla.
Ambuja expects its market share to increase by 2 per cent following the Orient deal, and will pay Rs 395.4 per share of the target company.
