Ambuja Cements, a part of the Adani Group, has announced the acquisition of Sanghi Industries (SIL) at an enterprise value of ₹5,000 crore. The acquisition will be fully funded through internal accruals.
What Happened: Ambuja will acquire 56.74% shares of SIL from its existing promoter group, Ravi Sanghi & family. SIL's integrated manufacturing unit at Sanghipuram in Gujarat's Kutch district is India's largest single-location cement and clinker unit by capacity.
The company has also floated an open offer to acquire an additional 26% shares. The price for the open offer is ₹114.22, which is an around14% premium on the stock’s Wednesday closing price of ₹100.40.
With 2,700 hectares of land, the integrated unit has two kilns with a clinker production capacity of 6.6 MTPA and a cement grinding unit with a capacity of 6.1 MTPA. It has a captive power plant of 130 MW and a Waste Heat Recovery System of 13 MW. The unit is also connected with a captive jetty at Sanghipuram, reports.
The acquisition of SIL will help the cement giant to strengthen its market leadership and increase its cement capacity to 73.6 MTPA from the current 67.5 MTPA. With the ongoing capex of 14 MTPA and with commissioning of 5.5 MTPA capacity at Dahej and Ametha by Q2 of FY24, the Adani Group's capacity will be 101 MTPA by 2025.
The company was reported to be the frontrunner for the acquisition.
Price Action: Ambuja Cements’s share price was up 0.46% to trade at ₹463 at market open on Thursday.
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