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Ambuja Cements Completes Rs. 5,185 Cr. Acquisition of Sanghi Industries

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Ambuja Cements Ltd., a major Indian cement manufacturer, has completed the acquisition of Sanghi Industries Ltd. (SIL) at an enterprise value of Rs. 5,185 crore. This information was conveyed by both parties via their respective stock filings dated 5th December 2023.

Ambuja Acquires Majority Stake in SIL using Internal Accruals

Ambuja Cements has utilised its internal accruals to acquire majority stake in Sanghi Industries.

Ambuja Cements has acquired 54.51% equity shares of SIL from its erstwhile promoters at a value of Rs. 121.90 per share, while an additional 2.23% shares will be acquired by Ambuja Cements at the same price from promoter groups of SIL.

Post Acquisition, Ambuja Cements’ Cement Capacity Reaches 74.6 MMTPA

With the aforementioned acquisition, Ambuja Cements’ cement production capacity has grown to 74.6 Million Metric Tonne Per Annum (MMTPA) from 68.5 MMTPA.

Sanghi Industries’ Acquisition Brings in Key Assets for Ambuja

With SIL’s acquisition, Ambuja Cements has grown its production capacity to 74.6 MMTPA

Sanghi Industries’ assets acquired by Ambuja Cements comprise two kilns which have a combined clinker capacity of 6.6 MMTPA and a cement grinding unit of 6.1 MMTPA capacity at its 2,700-acre Sanghipuram unit in Gujarat. This cement unit is India’s largest single-location clinker and cement unit. Moreover, SIL’s plant is also equipped with a 13 MW Waste Heat Recovery System (WHRS).

The unit has its all-weather captive jetty and a 13 MW captive power plant. SIL also has bulk receiving ports at Navlakhi in Gujarat, Dharamtar in Maharashtra, and Kochi, Kerala.

Apart from this, Sanghi Industries has 1 billion tonne of limestone reserves in Jadua, Gujarat.

Ambuja Cements Eyes 15 MMTPA Production Capacity along India’s West Coast

Sanghi Industries’ acquisition is a step towards Ambuja Cements’ larger plan to have 15 MMTPA cement production capacity in the states along India’s west coast, namely Gujarat, Maharashtra, Karnataka and Kerala in the next 30 months. Ambuja Cements also plans enhancing the capacity of SIL’s existing assets. The release stated that SIL’s clinker capacity can be easily enhanced by 0.5 MMTPA, and cement capacity by 1.5 MMTPA through ‘low-cost debottlenecking’.

Apart from this, Ambuja Cements stated that it would be expanding SIL’s existing jetty at Sanghipur to accommodate larger vessels.

Commenting on this acquisition, Mr. Ajay Kapur, CEO, Cement Business of Adani Group, said, This acquisition represents a significant step forward in our journey solidifying Adani Group’s leadership position in India’s cement industry. It strengthens our commitment to delivering high-quality products and services to our customers while contributing to India’s infrastructure development. We welcome the employees of Sanghi Industries into the Adani family and look forward to capitalizing on the synergies this acquisition offers”.

About Ambuja Cements Ltd.: Ambuja Cements Ltd. is a major Indian cement manufacturer, and owns Ambuja Cement and ACC labels. The company was acquired by the Adani Group from Switzerland’s Holcim Group in September 2022.