Having completed the deal with Holcim, Gautam Adani and his son Karan Adani of the Adani Group have taken over the reins of Ambuja Cements and decided to invest ₹20,001 crore in the company through convertible warrants.

Adani Group has paid ₹51,200 crore ($6.4 billion) to Switzerland-headquartered Holcim on Friday to acquire controlling stake in Ambuja Cement and ACC. The deal has catapulted Adani Group as the second largest cement producer after Aditya Birla Group company UltraTech Cement.

Adani Group has acquired Holcim Group’s entire 63.11 per cent stake in Ambuja Cements which owns 50.05 per cent stake in ACC. Holcim also divested 4.48 per cent stake it held individually in ACC.

Convertible warrants

Following closure of the deal, the Board of Ambuja Cements on Friday approved issuance of 47.74 crore convertible warrants constituting to 19.39 per cent of equity share capital to the Adani group company Harmonia Trade and Investments. The warrants priced at ₹418.87 each can be converted into equity share in 18 months and will be put for shareholders’ approval on October 8.

The existing directors of Ambuja Cements, including its Managing Director and CEO Neeraj Akhoury, and board of ACC have tendered their resignation.

Gautam Adani will take over as the Chairman of Ambuja Cements while his son Karan Adani will become an executive director. MR Kumar will represent LIC on the board. Other independent directors include Maheswar Sahu, Rajnish Kumar, Ameet Desai and Purvi Sheth.

ACC board appointment

Karan Adani will take over as Chairman of ACC while Vinay Prakash and Arun Kumar Anand have been appointed as executive directors. Designation of incumbent Managing Director and CEO Sridhar Balakrishnan has been changed to CEO and whole-time director. Other independent directors inducted on board include Sandeep Singhi, Nitin Shukla and Rajeev Agarwal. Both ACC and Ambuja Cements have changed their accounting period to financial year April to March from the existing January to December

Holcim gets payment

Switzerland headquartered Holcim on Friday said it has closed the sale of its business in India to the Adani Group, comprising its full stakes in Ambuja Cement at ₹385 a share and in ACC at ₹2,300 a share, resulting in cash proceeds of $6.4 billion.

Jan Jenisch, CEO, Holcim, said “I would like to thank our 10,700 Indian colleagues who have played an essential role in the development of our business over the years with their relentless dedication and expertise.”

Ambuja Cement and ACC have a grinding capacity of 35 million tonne each across 14 and 17 cement manufacturing plants across the country while ACC has addition 78 ready-mix concrete plants.

Lukewarm open-offer

The ports-to-enregy conglomerate Adani Group’s mandatory open offer for ACC and Ambuja Cements received a lukewarm response as the offer price was much less the then prevailing market price.

Adani Group will spend only ₹958 crore in the open offer against ₹31,140 crore set aside for the offer which closed on September 9.

In response to open offer, public shareholders of Ambuja Cements have tendered only 6.97 lakh shares against the original offer for 51.63 crore shares while the ACC shareholders tendered 40.51 lakh shares against the offer to buy 4.9 crore shares.

Even as the deal appears to have been closed for all the logical reasons, it is yet to receive the Competition Commission of India approval. The anti-competition body has levied a fine of ₹1,164 crore on Ambuja Cement and ₹1,148 crore on ACC for indulging in an alleged price cartelistion case. Both the companies have appealed against the penalty in the Supreme Court.

While Holcim has washed its hands off on being liable to the penalty, it is not clear whether Adani Group has given an undertaking to pay the penalty if the Supreme Court confirms the penalty.

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