Construction Industry News
Holcim Group's stake in Ambuja Cement and ACC Cement together has intensified, with ArcelorMittal expressing interest in acquiring the over $10 billion asset.
ArcelorMittal emerged as a formidable contender in Holcim Group. Its entry into the cement business will enable ArcelorMittal to build brand awareness in India and complement its steel business.
Holcim can take a premium from the new entrants to the cement industry as it will become the second largest producer in India.
Ambuja Cement and ACC have a combined production capacity of 66 million tons per year (mtpa), which will increase to 80 tons per year upon completion of the ongoing expansion projects.
Holcim has a 63% interest in Ambuja Cement and a 50.05% interest in ACC.
Since September, Holcim has sold its non-core assets and divested its Brazilian unit for $1 billion.
Ambuja Cement reported a 30% drop in the March quarter, with a net profit of Rs 856 crore, compared to Rs 1,228 crore, even though its income rose 3% to ₹7,990 crore from Rs 7,812 crore.
ACC's net profit fell 30% to ₹396 crore from Rs 563 crore while net sales increased 3% to Rs 4,322 crore from Rs 4,213 crore.
ArcelorMittal competes with other companies, including Adani Cement and JSW Group, for the acquisition of Holcim interests. Other players include UltraTech Cement and Shree Cement.
JSW Group has offered $4.5 billion in treasury shares and $2.5 billion with private equity partners.
ArcelorMittal, with the acquisition of Essar Steel assets, is optimistic about investing in India. This year in March, it entered into a strategic partnership with the Greenko Group to develop a 975 MW renewable energy project for Rs 4,570 crore in Andhra Pradesh.
This project is expected to be completed in two years. When completed, it will provide uninterrupted green energy to ArcelorMittal Nippon Steel (AM/NS) India for 25 years.
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