Ambuja Cements (NSE: AMBUJACEM), part of the Adani Group, on 22nd October (Tuesday), signed a legally binding agreement to purchase Orient Cement Limited (NSE: ORIENTCEM) with an equity value of around 8,100 crores.
The company announced in its exchange filing that Ambuja will acquire a 46.8 percent stake in OCL from its promoters & select shareholders for Rs 395.40 for each share.
The entire purchase will be funded through internally sourced resources. Adani Group is strengthening its footprint in the cement industry through several acquisitions.
In 2022, Adani Group acquired Ambuja and ACC. After this, Sanghi Industries was acquired in 2023 and now OCL is its latest acquisition.
In addition, Adani Group Company will make an open offer of 26% as a result of the proposed acquisition as per the SPA.
This will be an open offer for 5,34,19,567 equity shares, representing 26% of the expanded share capital.
The company said that the open offer will be completed by the provisions of SAST rules.
How Was The Effect On The Shares?
After this announcement, the shares of Orient Cement reached Rs 379 today, which is a 52-week high of Rs 7.25 thousand crores.
Ambuja Cement also opened at Rs 569 this morning and reached Rs 583.25. Its market cap is Rs 1,37,565 crore.
The company has said that the deal is likely to be completed in the next three to four months.
Orient Cement was established in 2011 and is mainly engaged in the business of manufacturing and selling cement. It recorded a turnover of ₹3,185.09 crore as of March 31, 2024.
What Will Be The Advantages Of Ambuja Cements?
Ambuja Cements said that this investment is following its strategy to grow the presence of its cement production sector.
This acquisition will be completed by 2028 This will help in moving towards the target capacity of 140 MTPA.
OCL is currently operating with 5.6 MTPA of clinker capacity and 8.5 MTPA cement operational capacity, 95 MW CPP, 10 MW WHRS, and 33 MW of renewable energy, spread throughout Telangana, Karnataka and Maharashtra.
This agreement will boost Adani Group’s market share within cement by a whopping 2 percent.
Quick Fact
| Company name | Ambuja Cements |
|---|---|
| Part of | Adani Group |
| Acquisition target | Orient Cement |
| Acquisition value | ₹8,100 crore |
| Stake acquired | 46.8% in Orient Cement |
| Share price offered | ₹395.40 per share |
| Financing method | Internal resources |
| Acquisition timeline | Complete by next 3-4 months |
| Recent acquisitions | Sanghi Industries (2023), Ambuja & ACC (2022) |
| Strategy | Increase market share in cement industry |
| Target capacity | 140 MTPA by 2028 |
| Market share increase | 2% after acquisition |
| Market cap (current) | ₹1,37,565 crore |
Orient Cement
| Company name | Orient Cement |
|---|---|
| Established | 2011 |
| Business focus | Cement manufacturing & sales |
| Annual turnover | ₹3,185.09 crore (as of March 31, 2024) |
| Existing capacity | 5.6 MTPA clinker, 8.5 MTPA cement |
| Power assets | 95 MW CPP, 10 MW WHRS |
| Renewable energy | 33 MW |
| Locations | Telangana, Karnataka, Maharashtra |
| Market cap (current) | ₹7.25 thousand crore |
| Open offer | 26% for 5,34,19,567 equity shares |
| Share performance | Reached ₹379 (52-week high) |
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