JSW and Adani fight over Holcim’s cement assets in India
India’s JSW Group plans to aggressively compete with Adani Group for the assets of Holcim AG’s local cement business, two sources said on Tuesday, paving the way for a bidding battle to become the country’s second largest player in the industry.
JSW steel-cement group chief Sajjan Jindal told the Financial Times on Tuesday that he would make a $7 billion bid for Holcim subsidiaries Ambuja Cements Ltd and ACC Ltd.
But a source with direct knowledge said the value of the deal could be much higher or even double as JSW and Adani, run by India’s richest man Gautam Adani, are looking for assets ready to sell. jobs that will immediately give the winner a big presence in the market.
Read also | Holcim eyes sale of Ambuja Cements for $9.6 billion
India is the world’s second largest cement producer and accounts for more than 7% of global installed capacity, according to government data.
A second source with direct knowledge said JSW considers ACC and Ambuja a “crown jewel” and that the company is “very aggressive and will fight (Adani) tooth and nail”.
JSW Group, Adani, Holcim, Ambuja Cements and ACC did not immediately respond to Reuters requests for comment.
JSW said it would offer $4.5 billion in equity and $2.5 billion from undisclosed private equity partners for the offering. The port-coal group Adani is planning its foray into cement by buying up Indian companies.
Switzerland’s Holcim will consider offers from Adani and JSW, but a deal would depend not only on financial terms but also on other contractual terms, one of the sources and another person said.
Once an agreement is advanced with a company, Holcim is determined to insert a termination clause to obtain “high” compensation if the transaction fails, one of the sources said.
Holcim has tried to diversify away from its core business, cement and aggregates, to focus more on building technology in a sustainable development context. .
Ambuja and ACC have a combined production capacity of at least 66 million tonnes per year, with plans for expansion. Any buyer of the two companies will become the second largest player in the country after the 120 million tons of UltraTech Cement.
JSW has a cement capacity of around 14 million tons per year, which it aims to increase to 25 million by next year.
Indian news channel ET Now reported on Tuesday that global steel giant ArcelorMittal is also “evaluating the possibility of bidding” for ACC and Ambuja. ArcelorMittal did not respond to a request for comment.