New Delhi: Following Holcim Ltd.’s decision to sell its majority stake to the conglomerate in May, the Adani Group has received regulatory approval for an open offer to purchase the remaining shares of two Indian cement manufacturers for Rs301 billion ($3.8 billion), according to people familiar with the situation.
The firm, led by Asia’s richest person Gautam Adani, is preparing to make an offer to buy 26% of Ambuja Cements Ltd. for Rs 385 per share and the same holding in ACC Ltd. for Rs 2,300 per share after receiving approval from the Securities and Exchange Board of India, according to persons familiar with the situation who did not want to be identified because the information is not public.
Adani Group and SEBI representatives did not immediately react when asked about the open offer permission.
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Indian stock market rules specify that acquiring 25% or more of the shares in a locally listed company would result in an obligatory open offer where minority shareholders can opt to sell their ownership to the new investor at a predetermined price. According to data gathered by Bloomberg, Adani’s open offer price for Ambuja is 6% lower than Thursday’s closing price, while that for ACC is 1% lower.
The acquisition was also approved last week by India’s antitrust authority.
In a sector that is incredibly fragmented and competitive, the Holcim purchase is expected to catapult the Adani Group to become India’s second-largest cement maker almost immediately.
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In May, Holcim and Adani Group reached an agreement to sell Holcim’s 63% holding in Ambuja Cements, a Mumbai-listed company. At the time, Adani Group said it will spend around $10.5 billion on stake purchases and open offer consideration for Ambuja and affiliated companies.
As part of the agreement, Adani would acquire Holcim’s direct 4.5% investment in the company as well as Ambuja’s majority interest in ACC, a publicly traded cement producer.
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