Mumbai: Adani (Adani) family has established a special purpose vehicle Endeavor Trade and Investment Ltd. (“BidCo”), through Ambuja Cements Ltd. and has successfully completed the acquisition of ACC Ltd. This acquisition includes Holcim’s stake in Ambuja and ACC along with an open offer in both these companies as per SEBI regulations. Holcim’s stake in Ambuja Cements and ACC and taking into account the open offer is estimated at US$ 6.05 billion. Apart from being the largest acquisition, it is also India’s largest acquisition ever in the infrastructure and materials management and acquisition (M&A) sector. After the deal, Adani will hold 63.15% stake in Ambuja Cement and 56.69% in ACC (of which 50.05% is held through Ambuja Cement).
Cement an exciting business for growth in India
“This makes cement an exciting business for growth in India, which will surpass all other countries after 2050,” said Mr. Gautam Adani, Chairman, Adani Group. Cement is a game changer based on energy costs, logistics and distribution costs, and the ability to leverage digital platforms to transform manufacturing and achieve significant supply chain efficiencies. Each of these capabilities is a core business for us and therefore provides a number of synergies that are not tied to our cement business. These are the engagements that ultimately drive competitive economics. Moreover, our position as one of the world’s largest renewable energy companies will help us to produce premium quality green cement well in line with the principles of circular economy. All these parameters put us on track to become the largest and most efficient cement producer by 2030.” he added.
Infrastructural large supply chains extending to hinterlands
At present the combined installed production capacity of Ambuja Cements and ACC is 67.5 MT per annum. Among India’s strongest brands, these two companies have a vast supply chain infrastructure spanning manufacturing and downstream sectors, represented by 14 integrated units, 16 grinding units, 79 ready-mix concrete plants and 78,000 channel partners spread across India. .The board of Ambuja Cements has approved an investment of Rs.20,000 crore in Ambuja through preferential allotment of warrants. This investment will equip Ambuja to capture market growth. In line with Adani Group’s business logic, these steps will significantly accelerate value creation for all stakeholders.
Restructured in line with governance philosophy
Businesses will be closely aligned with the UN Sustainability Development Goals with a clear focus on SDG 6 (Clean Water and Sanitation), SDG 7 (Sustainable and Clean Energy), SDG 11 (Sustainable Cities and Communities) and SDG 13 (Climate Action).Ambuja The board committees of both Cements and ACC have been restructured in line with the governance philosophy of the Adani portfolio. The Audit Committee as well as the Nomination and Remuneration Committee are now constituted of 100% independent directors. In addition, two new committees namely Corporate Responsibility Committee and Public Consumer Committee have been constituted.
Incorporation of 100% independent directors to maximize customer satisfaction
Both include 100% independent directors to assure the board on ESG commitments and maximize customer satisfaction. In addition, a Commodity Price Committee has been formed to strengthen risk management comprising 50% independent directors.14 The deal was financed through aggregate facilities of US$ 4.50 billion obtained from international banks. Barclays Bank plc, Deutsche Bank AG and Standard Chartered Bank acted as the original mandated lead arrangers and bookrunners for the acquisition. Barclays Bank plc, DBS Bank, Deutsche Bank AG, MUFG Bank and Standard Chartered Bank acted as mandated lead arrangers and bookrunners for the transaction.
Standard Chartered Bank acted as structuring advisor
In addition, BNP Paribas, Citibank, Emirates NBD Bank, First Abu Dhabi Bank, ING Bank, Intesa Sanpaolo SpA, Mizuho Bank, Sumitomo Mitsui Banking Corporation and Qatar National Bank acted as mandated lead arrangers for the transaction. Barclays Bank plc and Deutsche Standard Chartered Bank acted as structuring advisor with Bank AG BidCo, management and acquisition advisors.