After Adani, JSW Group To Make $7 Billion Bid To Acquire Ambuja Cement, ACC From Holcim: Report
Indian metals-to-cement congolmerate JSW Group is likely to make a $7 billion bid for acquiring Holcim Group’s India subsidiaries Ambuja Cements and ACC.
The JSW Group is likely to offer $4.5 billion in its own equity and $2.5 billion from undisclosed private equity partners for the bid, company’s chairman Sajjan Jindal told Financial Times.
According to the FT report, Jindal added that the company will acquire 63 per cent stake in Ambuja Cements.
Ambuja cement, a publicly traded firm, is a market leader in India’s cement industry with an annual production capacity of 31 million metric tonnes from its six integrated manufacturing plants and eight cement grinding units.
Holcim controls 63.1 per cent of Ambuja Cements. The former has been considering the sale of its stake in the latter. ACC Ltd is Ambuja’s subsidiary.
ACC Ltd, which is also a publicly traded firm, is a subsidiary of Ambuja.
Switzerland based Holcim controls 63.1 per cent of Ambuja, and it is considering the sale of its stake as part of its ongoing sale of non-core assets.
Holcim reportedly plans to diversify away from core business of cement and aggregates to focus more on building technology amid enhances emphasis on sustainability.
JSW Group’s bid comes as Adani Group is also planning to buy the cement companies from Holcim.
The Gautam Adani-led firm was in talks with Sheikh Tahnoon bin Zayed Al Nahyan of the United Arab Emirates’ ruling family and other investment groups in the Middle East to raise funds for acquisition of Ambuja and ACC cement companies.
The Adani group plans a unique acquisition and financing structure for the potential $7.5-billion buyout of the two cement companies.
According to a report by The Economic Times, Adani may float a group entity based in Dubai as the principal vehicle for the transaction by capitalizing an SPV under it to the tune of $3 billion.
Both the Adani family and Middle Eastern investor group may contribute this amount as equity.
Reportedly, this SPV would float another SPV with $3 billion equity and around $4.5 billion in funding from global banks such as Deutsche Bank, Barclays and Standard Chartered Bank.