CORPORATE
Ambuja to acquire Orient Cement in market leadership battle with UltraTech
- IBJ Bureau
- Oct 23, 2024
Ambuja Cements, India’s second-largest cement-maker, said on Tuesday that it would buy a nearly 47 per cent stake in rival Orient Cement for Rs 3,791 crore, but analysts raised doubts about the deal winning regulatory approval.
Ambuja, a part of billionaire Gautam Adani’s ports-to-power conglomerate, said that it would buy the entire 37.9 per cent stake held by Orient’s large shareholders, including Chairman C K Birla, and the rest from public shareholders in a deal that values the company at Rs 8,100 crore. This would trigger an open offer for an additional 26 per cent stake in Orient.
This is the latest among a host of deals in the cement sector recently and the second by Ambuja this year as the company aims to topple UltraTech Cement, a part of the Aditya Birla Group, from the top position.
Orient – which UltraTech and Sajjan Jindal’s JSW Cement were also interested in – has two cement plants in south India and one in western India.
Ambuja, which expects the deal to boost Adani’s market share by 2 per cent, said that it would pay Rs 3,954 rupees per Orient share, a 12 per cent premium to the stock’s closing price on Monday.
Orient’s shares jumped 7.5 per cent to a record high of Rs 379 on Monday but soon reversed course to trade at Rs 346.70, below the offer price, which analysts said was a sign of worries about potential regulatory concerns.
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