Holcim stays mum on Indian bid talk

Holcim, the world's second biggest cement maker, has declined comment on market talk that it was eyeing India's third-largest cement maker Gujarat Ambuja Cements Ltd to expand its operations in India.

A spokesman for the Swiss company, which has a market capitalisation of $16.2 billion, had no comment on the market rumours on Wednesday but noted the group already has a presence in India. "In principle we believe in the Indian market (and) that is why we have entered the market," he said.

Holcim owns a 35 per cent stake in Associated Cement Companies Ltd "" Gujarat Ambuja's larger rival. Earlier the Julius Baer equities advisory team said there was market talk that Holcim was interested in bidding for Gujarat Ambuja for Rs 105 per share, which would value the company at around $3.2 billion.

Gujarat Ambuja said it was not aware of any takeover plans.

Shares in the Indian company rose some 8 per cent in Mumbai on the market talk while Holcim shares were little changed at 90.65 Francs.

"Even such a move could be seen as positive, (though) a possible capital increase could put some pressure on the stock," the JB Equities Advisory team said in a note.

India's cement industry is booming with cement makers increasing production to meet orders for new homes and roads for an economy growing by 8 per cent a year.

Nearly 25 million tonnes of cement capacity will be added in the next three years, on top of an existing annual 152 million tonnes, to meet anticipated annual demand growth of 10 per cent.