Ambuja Big Move : Acquiring Orient Cement for Rs 8,100 Crore and Additional 26% Stake

In a significant move, Ambuja Cement announced on Tuesday that it will acquire a 46.8% stake in Orient Cement Ltd (OCL) for an equity value of Rs 8,100 crore. This acquisition aims to increase Ambuja’s cement capacity to 100 MTPA by FY25 and enhance its pan-India market share by 2%. Additionally, Ambuja Cement will make an open offer to acquire an additional 26% stake in OCL.

The company stated in a stock exchange filing, “Within 3-4 months, the Open Offer shall be completed in accordance with the provisions of the SAST (Substantial Acquisition of Shares and Takeovers) Regulations. The Open Offer is being made at Rs 395.40 per equity share, which has been determined in accordance with SAST Regulations.”

Orient Cement Share Price :

Following the announcement of this acquisition deal, shares of both involved cement players saw a positive response. Ambuja’s shares increased by 1.49%, reaching Rs 580, while shares of Orient Cement were trading at Rs 358.25, up by 1.65% as of 9:20 am.

Ambuja Cement plans to acquire 46.8% shares of OCL from its current promoters and certain public shareholders. The entire acquisition will be funded through internal accruals. Karan Adani, Director of Ambuja Cements, commented, “This timed acquisition marks another significant step forward in Ambuja Cements’ accelerated growth journey, increasing cement capacity by ~30 MTPA within two years of Ambuja’s acquisition.”

This acquisition represents a strategic move to expand Ambuja’s footprint in the Indian cement industry. With the increased capacity, the company is well-positioned to meet the growing demand for cement in the country. The move aligns with Ambuja’s long-term growth strategy and underscores its commitment to enhancing shareholder value.

Ambuja Cement’s acquisition of OCL is expected to bring several benefits. Firstly, the increased capacity will enable the company to cater to a larger customer base and strengthen its market presence. Secondly, the acquisition will provide operational synergies, allowing Ambuja to optimize its production processes and reduce costs. Thirdly, the deal will enhance Ambuja’s product portfolio, enabling the company to offer a wider range of cement products to its customers.

The open offer, priced at Rs 395.40 per equity share, is a strategic move to acquire an additional 26% stake in OCL. This will further consolidate Ambuja’s control over OCL and ensure a seamless integration of the two companies. The open offer is expected to be completed within 3-4 months, following the provisions of the SAST Regulations.

Market analysts have responded positively to the acquisition deal. They believe that the increased capacity and enhanced market share will drive Ambuja’s growth in the coming years. The acquisition is also expected to provide a boost to Ambuja’s financial performance, with increased revenue and profitability.