Adani Group completes acquisition of Sanghi Industries, revises offer price to Rs 121.90/share

New Delhi: Billionaire Gautam Adani-owned Ambuja Cements Ltd on Tuesday announced the completion of the acquisition of Sanghi Industries Limited (SIL), at a revised offer price of Rs 121.90 per share.

Earlier in August this year, Ambuja Cements Ltd (ACL) had offered a price of Rs 114.22 apiece for acquiring 26 per cent equity shares of Rs 10 each of Sanghi Industries from its public shareholders.

"In terms of the company's obligations under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ('Takeover Regulations'), the offer price as defined in the PA shall stand revised to Rs 121.90," Ambuja Cements said in a regulatory filing.

Meanwhile, shares of Sanghi Industries were trading at Rs 129.90 during the afternoon on Tuesday, which is 6.56 per cent higher than the revised offer price.

ACL in a separate statement informed that it "successfully completes acquisition of Sanghi Industries, funded entirely through internal accruals" at an enterprise value of Rs 5,185 crore.

"With the acquisition funded entirely through internal accruals, ACL holds a controlling stake of 54.51 per cent in SIL," it said.

With this, the production capacity of ACL, which also owns ACC Ltd, has increased from 68.5 to 74.6 MTPA (Million Tonnes Per Annum).

"ACL will increase its coastal footprint with this acquisition & by increasing capacity to 15 MTPA across the West Coast markets with states of Gujarat, Maharashtra, Karnataka, Kerala at a very competitive cost based on SIL's strength of low-cost clinker. This additional capacity to be commissioned over next 30 months," it said.

On August 3, 2023, ACL had announced that it will acquire 56.74 per cent of Sanghi Industries by acquiring 14.65 crore shares of the company.

As per the share purchase agreement, it acquired 14.08 crore shares of Sanghi Industries from the promoters at a price of Rs 121.90 per equity share. While the remaining 57.56 lakh shares of the promoter group representing 2.23 per cent will be acquired separately, at the same price, informed ACL.

SIL, has a 2,700-hectare integrated manufacturing unit at Sanghipuram in coastal Gujarat. It has India's largest single-location cement and clinker production facility.

This facility comprises of two kilns with an impressive clinker production capacity of 6.6 MTPA, a cement grinding unit of 6.1 MTPA, a dedicated 13 MW captive power plant and an efficient 13 MW Waste Heat Recovery System.

Moreover, it has a captive jetty in Sanghipuram, which Adani group plans to make investments to expand the captive port capacity of to handle vessel sizes of 8,000 DWT (deadweight tonnage), Adani Ports and Special Economic Zones (APSEZ) CEO Karan Adani had said on Augst 3, while announcing the deal.

"The acquisition of SIL, with its billion-tonne high quality surface mining limestone reserves, positions ACL to expedite its unique coastal strategy, aiming to increase the cement capacity to 15 MTPA along the West Coast on the strength of SIL’s low-cost clinker," said ACL adding this "initiative will leverage the strengths of Ambuja and ACC brands." It further said ACL will invest in expanding the existing captive port at Sanghipuram to accommodate larger vessels, to meet the growing demand for cement across Gujarat, Maharashtra, Karnataka & Kerala at a competitive cost.

"This is expected to be commissioned over next 30 months," it said.

Adani's Cement Business CEO Ajay Kapur said this acquisition represents a significant step forward in our journey solidifying Adani Group’s leadership position in India's cement industry.

"We welcome the employees of Sanghi Industries into the Adani family and look forward to capitalising on the synergies this acquisition offers. Recognizing the Adani Group's expertise in marine infrastructure, plans are underway to expand the Sanghipuram port's capacity to handle larger vessels, facilitating cost-effective transportation of clinker and cement via sea routes," he said.

Ambuja Cements is the second leading cement producer after Aditya Birla Group firm UltraTech Cements, which had a consolidated capacity of 137.85 Million Tonnes Per Annum (MTPA).