Construction Industry News
The Holcim Group, the world's largest cement producer, may exit India and put its twin listed companies, Ambuja Cements and ACC Ltd, up for sale as part of a global plan to focus on core markets.
JSW Steel India and Adani Group, among others, are said to have held early talks with Holcim to explore their levels of interest. Both are newcomers to the cement industry, but have big plans for growth.
According to the sources, feelers have also been sent to regional cement companies such as Shree Cement.
Global cement companies that have been eyeing India for some time are expected to be approached as the acquisition of both Ambuja and ACC would put each player second in the highly competitive, fragmented and price sensitive market, with a combined pan- Indian capacity of 66 million tons per year.
Holcim, founded in Switzerland, merged with French competitor Lafarge in 2015 to form a global conglomerate.
Lafarge Holcim, a European cement and building materials giant, had to undergo several restructurings to comply with antitrust regulators around the world, including divestment of properties in Europe and Asia, including India. Since then, the unified company has been renamed Holcim Group.
The total market cap of the two companies is Rs 1.14 lakh crore, with Ambuja alone valued at Rs 73,349 crore, making it one of India's leading potential mergers and acquisitions. Any merger would also result in an open offer in both for a 26% stake in the company.
Discussions between Holcim's senior management and their colleagues at JSW and Adani have been underway in India and Europe for several weeks and have gained momentum in recent days.
Potential suitors have approached global institutions to organize at least $5-7 billion in potential funding.
Holcim has highlighted specialty building solutions and high-performance energy-efficient renovations as a key focus coming soon, as part of a global re-evaluation of its massive portfolio that will see old businesses divest.
It is part of the company's strategic strategy 2025 - Accelerating Green Growth, which strives for solutions for sustainable building materials. Compared to ready-mixed concrete, aggregates, roofing and green building solutions, the importance of cement is decreasing across the group.
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