(Bloomberg) — Ambuja Cements Ltd., part of the Adani Group, has agreed to acquire Orient Cement Ltd. in a deal valued at 81 billion rupees ($963 million), as billionaire Gautam Adani continues to snap up makers of the key raw material needed for India’s infrastructure push.
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Ambuja will acquire 46.8% shares of Orient Cement from its current founders and certain public shareholders, the company said in an exchange filing Tuesday. The transaction will be fully funded by internal accruals.
It will also make an open offer for 26% stake in Orient at 395.40 rupees a share, according to the filing, a premium of 12% on Monday’s closing price of 352.45 rupees. Orient’s shares surged as much as 7.7% on Tuesday in Mumbai while Ambuja advanced as much as 2%.
The latest acquisition adds 16.6 million tons annual cement capacity for the ports-to-power conglomerate and shows an escalating asset race between Asia’s second-richest person and the sector leader, UltraTech Cement Ltd., led by billionaire Kumar Mangalam Birla.
More than half a dozen deals have been stitched by the two in two years and many smaller players are still up for grabs.
Orient’s “strategic locations, high-quality limestone reserves and requisite statutory approvals present an opportunity to increase cement capacity in the near term,” Karan Adani, director of Ambuja Cements, and Gautam’s son, said in the filing.
Battle lines are being drawn in India’s cement space as Adani Group’s buyout spree rapidly adds to its 79 million tons capacity with a target of 140 million tons by 2028. UltraTech, which has a current capacity of 150 million tons, is looking to scale up to 200 million tons by March 2027.
Critical Material
Both the billionaires are seeking to dominate supplies of a building material that is critical to sustaining India’s infrastructure boom.
Indian Prime Minister Narendra Modi’s mission to build everything from airport and power facilities to roads, bridges and tunnels will spur India’s infrastructure investment to 15 trillion rupees by March 2026, according to Crisil Ratings.
Adani Group’s big bang entry in 2022 upended the local pecking order — it became No. 2 cement maker overnight with the acquisition of Ambuja and ACC Ltd. — but it spent much of 2023 fire-fighting after Hindenburg Research’s scathing report.
Gautam Adani’s empire only got back to its expansionist ways fully this year. As part of this revived growth spree, it has been acquiring cement makers, stoking has a turf war with the entrenched incumbent. UltraTech is also expanding capacity and bought a controlling stake in a coveted cement maker in July.
(Updates with details throughout.)
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