Mumbai: Billionaire Gautam Adani’s Ambuja cements is all set to buy 47% stake of Orient Cement from Chandra Kant Birla’s family. The Ambuja cement is buying the stake for Rs 3,791 crore. The deal will surpass UltraTech Cement, owned by Kumar Mangalam Birla and will make Adani’s company the largest cement producer. As required, Ambuja will buy an additional stake of 26% from Orient cement’s public shareholders for Rs 2,112 crore. This will be Ambuja’s fifth purchase after Adani took over it in Sept 2022. Previously Ambuja purchased the Hyderabad-based Penna Cement in June.
Not only Ambuja cement, UltraTech and JSW Cement were also had an eye on Orient cement. Orient Cement is an attractive purchase due to its low production costs, minimal debt, and potential for growth. Its capacity can be doubled to 17 million tonnes and it owns a limestone mine in Rajasthan for future expansion. It has plants in Telangana, Karnataka, and Maharashtra. After buying, Ambuja will gain 3 new plants
and 7.5 million tonnes annual production capacity. It will increase Ambuja’s production capacity and expand it’s presence in South India. Total capacity of Ambuja Cement for now is, 97 million tonnes. It aims to fulfill the target of 140 million tonnes by 2028. Similarly, UltraTech currently has a capacity of over 180 million tonnes and it aims to reach 200 million tonnes by 2027.
The Chandra Kant Birla group is selling the Orient Cement to focus on priority business. He currently has 50 clinics across India. He is planning to expand his healthcare business with two fertility chain acquisitions. In March, the group acquired a well-known pipes and fittings brand in East India named Topline to to strengthen its home and building materials portfolio.
CK Birla the chairman of CK Birla groups, praised Adani Group. He said, he have immense faith in Adani’s ability to drive growth at Orient Cement. “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,” he said.
Reportedly, Ambuja is purchasing the Orient Cement by it’s own funds of Rs 23,000 crore. The fund is being provided by Adani. The business deal will help Ambuja in expanding it’s cement production, reducing transportation costs and increasing market share. 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.
