Ambuja, ACC in the block when Holcim has Indian return thinking

Holcim Group, the largest cement maker in the world, can get out of India, seventeen years after entering the country, placing Twin weapons registered ambuja cement and ACC for sale, as part of a global strategy to focus on the core market, several conscious people said Will the decision.

Holcim is believed to have held a negotiation of the initial stages with JSW and Adani Group, among others, to explore their level of interest. Both are recent entrants in the cement sector but have an aggressive plan to increase.

The source in Know said it was also sent to regional cement operators such as Semen Shree. The global cement company that has swirled around India is also expected to be tapped, since taking over Ambuja and ACC will make any player to second with a combined capacity of 66 million tons per year with a very competitive, fragmented and price sensitive price.

Aditya Birla Group’s Ultratech is the largest cement company in India with a capacity of 117 MTPA.

Holcim based in Switzerland who globally joined the French Lafarge rival in 2015 to make Mega LafargeHolcim entities – cement material giants and European buildings – forced to through several restructuring to comply with anti-trust regulators throughout the world, by distributing assets throughout Europe and Asia, including India. The combined entity has since been renamed a Holcim Group.

Holcim’s superior entity in India is where the cement is ambuja, as a promoter, has 63.1% through investment holderind limited. Ambuja Cement in turn has 50.05% of ACC Ltd. Holderind Investment (Holcim) has 4.48% in ACC directly. Since 2018, Holcim has tried to streamline operations by combining two operations for maximum costs and operational efficiency, but the process is still incomplete.

As on Wednesday, the combined market capitalization of the two companies is Rs 1.14 Lakh Crore ($ 15 billion) with Ambuja just at Rs 73,349 Crore ($ 9.7 billion), making it one of the biggest M & Fill potential in India . Every potential transaction will also trigger an open offer either for the acquisition of adding 26%.

Ambuja shares have risen 16% since April 6, may anticipate large agreements, while ACC rose 2% in the same period. On Wednesday, the ambuja stock was closed at RS 369.40 / sharing, up 2.6% and ACC at RS 2207.15 / share, up 1.16%. The head of the Holcim media relations at the headquarters of Zug, Switzerland, said, “We did not comment on rumors”.

JSW refused to comment. Adani did not respond to the press time.

Calls and messages to HM Bangur, MD, Shree Cement also does not produce a response.

Dynamics deal

Discussion among the senior Leadership of Holcim and their colleagues at JSW and Adani have been going on for several weeks in India and Europe and have gathered momentum in the past few days. Global institutions have been approached by potential applicants to regulate at least $ 5-7 billion potential funds.

However, sources that warn this discussion are still introduction and may or may not lead to transactions. Contour and final final assessment have not been resolved.

According to officials to know, because Holcim itself has a large share ownership in the superior Ambuja and only has a small portion in ACC, potential buyers can only buy 63% Holcim in the former and then trigger an open offer for an additional 26% in Ambuja Cement. If fully subscribed, new owners can end up having 89% of companies. It itself can be a transaction of Rs 65,280 Crore ($ 8.7 billion) at the current market price.

For ACC, applicants can only launch a 26% open offer after obtaining 4.48% from Holcim because the remaining 50% is held through Ambuja Cement. It will be an additional Rs 12,434 Crore ($ 1.65 billion), with current prices.