Gautam Adani-led Adani Group is going to merge its cement business soon. Adani Group has bought several major cement companies of the country one after the other in the recent past.
These include ACC, Ambuja Cement and Penna Cement. Now all these companies will be brought under the umbrella of one company. Adani Group is trying to complete the merger of these companies at the earliest.
Adani Group bought ACC and Ambuja Cement for around $6.4 billion in September 2022, according to a Jefferies report. By buying these companies, Adani Group became the second largest cement company in the country after UltraTech Cement.
Adani management believes that the cost of the merger will not cause any problems. However, the merger process will be progressed keeping in mind the interests of the minority and majority shareholders.
Adani Group bought Sanghi Industries for Rs 5,185 crore in December last year. The money for this acquisition was raised from internal sources. Earlier this month, the company also bought Hyderabad-based Penna Cement for Rs 10,420 crore.
With this acquisition, Adani Group's cement production capacity has increased to 89 MTPA. The company aims to increase its cement production capacity to 140 MTPA by 2028. Currently, Aditya Birla Group's Ultratech Cement is the largest cement company in the country with a capacity of 152.7 MTPA.
Jeffries has said that the Adani Group will strengthen its position in South India by buying Penna Cement. Besides, Adani Cement's sea transportation logistics will be strengthened. It will have five bulk cement terminals at Kolkata, Gopalpur, Karaikal, Kochi and Colombo. On the other hand, the financial performance of Ambuja Cement is also improving. Shares of the company have jumped 22 percent this year and are trading around Rs 657.
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