Ambuja Cements has made an acquisition of Sanghi Industries Ltd for Rs 5,000 crore. The acquisition was funded internally. This has allowed Ambuja Cements to secure a controlling stake of 56.74%. Pending the approvals this move is expected to enhance Ambujas market presence and increase their cement capacity to 73.6 MTPA. Moreover, it aligns with Adani Group’s ambition of reaching a cement capacity of 140 MTPA by 2028. This strategic deal strengthens Ambuja’s position, in the industry. Opens up avenues, for growth.
In a significant move, Ambuja Cements revealed its plans on Thursday to acquire Sanghi Industries Ltd (SIL) in a strategic deal worth Rs 5,000 crore. This acquisition, fully financed from internal accruals, involves Ambuja securing a controlling 56.74 percent stake in SIL, which is presently held by the promoter group led by Ravi Sanghi & family. The transaction is slated to conclude within the coming three to four months, pending necessary regulatory clearances, as stated in an official filing with the stock exchange.
Under the terms of the agreement, Ambuja Cements will acquire a substantial 56.74 percent of the voting share capital of Sanghi Industries Limited. This translates to a potential acquisition of up to 14,65,78,491 equity shares at a rate of Rs 114.22 per share, subject to requisite statutory and regulatory approvals. Furthermore, Ambuja intends to extend an open offer for an additional 26 percent of the share capital, amounting to 6,71,64,760 equity shares, at the same per-equity share price of Rs 114.22.
Gautam Adani, the Chairman of the Adani Group, expressed his enthusiasm about the acquisition, emphasizing its potential to expand Ambuja’s market presence, fortify its product portfolio, and solidify its position as a pioneering player in the construction materials domain.
Adani also highlighted how this strategic move would enable the Adani Group to achieve its ambitious target of reaching a cement manufacturing capacity of 140 million metric tonnes per annum (MTPA) by 2028, ahead of the projected timeline.
By integrating Sanghi Industries Ltd into its fold, Ambuja Cements is set to significantly enhance its cement production capabilities, with the capacity projected to rise from the current 67.5 MTPA to 73.6 MTPA. The company’s expansion will be bolstered by ongoing capital expenditure, including the commissioning of 5.5 MTPA capacity at the Dahej and Ametha plants by the second quarter of fiscal year 2024. As a result, the Adani Group’s total cement manufacturing capacity is anticipated to reach a substantial 101 MTPA by 2025.
As part of its forward-looking strategy, Ambuja Cements aims to elevate the cement capacity of SIL’s Sanghipuram facility to an impressive 15 MTPA over the next two years. Additionally, Ambuja’s board recently approved an inter-corporate deposit agreement with Sanghi Industries Limited. This agreement entails providing an unsecured intercorporate deposit of up to Rs 300 crore in one or more installments, intended for general corporate purposes.
