Ambuja Cements gets CCI nod to acquire majority stake in Orient Cement

The Competition Commission of India on Tuesday cleared Ambuja Cements' proposal to acquire a majority stake in CK Birla group firm Orient Cement Ltd for Rs 8,100 crore.

Ambuja Cements, a part of the diversified Adani Group, operates 22 integrated cement plants across India, as well as 10 bulk cement terminals and 21 grinding units.

"The proposed transaction comprises the acquisition of 46.80 per cent of the issued share capital in the target (Orient Cement) by the acquirer (Ambuja Cements)," CCI said in a release.

This includes 37.90 per cent held by the current promoter and promoter group and 8.90 per cent from certain public shareholders, it said.

Pursuant to the acquisition of shares, it triggers an obligation on the acquirer to make an open offer under Sebi's SAST (Substantial Acquisition of Shares and Takeovers) regulations for acquisition of up to 26 per cent of the expanded share capital of the Orient Cement, CCI added.

Assuming acceptance of the open offer, Ambuja Cements's stake in the target company will increase to 72.8 per cent.

"CCI approves the proposed acquisition of up to 72.8 per cent shareholding of Orient Cement Ltd by Ambuja Cements Ltd," the Competition Commission of India said.

Orient Cement has three manufacturing facilities in Telangana, Karnataka and Maharashtra, with distribution in 10 states across India.

In October last year, billionaire Gautam Adani-led Adani Group signed a binding agreement for the acquisition of Orient Cement Ltd (OCL) at an equity value of Rs 8,100 crore.

The acquisition will add 16.6 MTPA (million tonne per annum) capacity to Adani Cement, which operates through Ambuja Cements in the sector.

Prior to that in June 2024, Adani had announced the acquisition of Hyderabad-based Penna Cement at an enterprise value of Rs 10,422 crore, which added 14 MTPA capacity to the country's second-largest manufacturer.

In another release, the fair trade regulator CCI stated that it has granted clearance to Adani Infra to acquire a stake in PSP Projects Ltd. Adani Infra is a unit of Adani group's flagship firm Adani Enterprises.

PSP Projects, which has industrial, institutional, residential and luxury projects like the Surat Diamond Bourse, had an order book of Rs 6,546 crore as of September 2024.

"The proposed transaction involves the acquisition by Adani Infra (India) of equity shares of PSP Projects from Prahaladbhai S Patel (seller).

"Public shareholders by way of an open offer, such that post-closing of the initial acquisition and open offer, the acquirer (Adani Infra) and the seller and other existing promoters would hold equal shareholding," CCI said.

In November last year, Adani Infra said it will buy a 30.07 per cent stake in construction firm PSP Projects for Rs 685.36 crore as it looks to consolidate its construction capabilities.

Existing promoters hold a 60.14 per cent interest in PSP Projects. Prabhladbhai S Patel holds 47.76 per cent holding, of which he is selling 30.07 per cent.

Ahmedabad-based Adani Group has in recent months done a series of acquisitions to strengthen its footprint across multiple sectors.

After the stake sale, the existing promoters and Adani Infra will each hold a 30.07 per cent stake.

Further, the open offer for an additional 26 per cent stake that Adani Infra will have to make to minority shareholders of PSP will make the conglomerate the single largest shareholder in the firm.