Mumbai, November 2024—In a major push to strengthen its foothold in the Indian cement market, Gautam Adani-led Ambuja Cements has applied for approval from the Competition Commission of India (CCI) to acquire a majority stake in Orient Cement Ltd, a prominent CK Birla Group company. This proposed acquisition, valued at Rs 8,100 crore, aligns with Adani Group’s rapid expansion in the cement sector and adds considerable capacity to Ambuja’s portfolio.
The acquisition will proceed in two stages, with Ambuja Cements initially securing a 46.8% stake in Orient Cement—37.9% from the promoter group and 8.9% from select public shareholders. Following this initial stake, Ambuja Cements will launch an open offer under SEBI’s Substantial Acquisition of Shares and Takeovers (SAST) regulations to acquire an additional 26% of Orient Cement’s expanded share capital. If the open offer reaches full acceptance, Ambuja Cements’ total stake will stand at a dominant 72.8%.
This acquisition brings 16.6 MTPA (million tonnes per annum) capacity to Ambuja’s portfolio, marking a strategic expansion in key regions such as Telangana, Maharashtra, and Karnataka. Ambuja Cements, part of the diversified Adani Group, currently operates 22 integrated cement plants, 10 bulk cement terminals, and 21 grinding units across India, making it a key player in the country’s cement industry. The addition of Orient Cement’s facilities will further boost Ambuja’s operational scale and market penetration in India’s high-demand regions.
Orient Cement’s production and distribution network spans 10 states, offering Ambuja Cements significant access to new and growing markets. In its review, the CCI will assess the impact on two specific market segments: a broad market for grey cement in Telangana, Maharashtra, Karnataka, Madhya Pradesh, and Gujarat, and a narrower market limited to Telangana, Maharashtra, and Karnataka.
Both Ambuja Cements and Orient Cement have noted the presence of vertical linkages within their operations, particularly in the supply of essential inputs like limestone, fly ash, and clinker, as well as services like coal management and ready-mix concrete. These arrangements, however, are not expected to pose competition concerns, leaving CCI with flexibility in its market evaluation.
The proposed acquisition follows Adani Group’s recent Rs 10,422 crore acquisition of Penna Cement, adding 14 MTPA capacity and establishing Adani as a dominant player in India’s cement sector. The addition of Orient Cement would not only reinforce Adani’s position as the second-largest cement producer in the country but also enable Ambuja Cements to meet the growing demand in India’s infrastructure and construction sectors.
