Ambuja Cements to buy 56.7% stake in Sanghi at a valuation of Rs 5,000 cr

Ambuja Cements' acquisition of Sanghi Industries is expected to be completed in the next three to four months

Ambuja Cements on Thursday announced that it would acquire Sanghi Industries Ltd (SIL) at an enterprise valuation of Rs 5,000 crore. The Adani Group company will acquire a 56.74 per cent stake in SIL from its existing promoter group, Ravi Sanghi & family. The acquisition will be fully funded through internal accruals.

According to a stock exchange filing, the acquisition will be completed in the next three to four months.

"Acquisition of up to 14,65,78,491 equity shares of Sanghi Industries Limited, representing 56.74 per cent of the voting share capital as defined in the public announcement from the promoters of the target company, subject to statutory and regulatory approvals for a consideration of up to Rs 114.22 per share," the company said.

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It added that the company would make an open offer for up to 6,71,64,760 equity shares, constituting 26 per cent of the share capital for Rs 114.22 per equity share.

"By joining hands with SIL, Ambuja is poised to expand its market presence, strengthen its product portfolio, and reinforce its position as a leader in the construction materials sector. With this acquisition, the Adani Group is well on course to achieve its target of 140 MTPA of cement manufacturing capacity by 2028 ahead of time," said Gautam Adani, chairman of the Adani Group.

The acquisition of SIL will help ACL to increase its cement capacity to 73.6 MTPA from the current 67.5 MTPA.

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"With the ongoing capex of 14 MTPA and with commissioning of 5.5 MTPA capacity at Dahej and Ametha by Q2 of FY24, the Adani Group's capacity will be 101 MTPA by 2025," it said.

Moreover, ACL will increase the cement capacity at SIL's Sanghipuram facility to 15 MTPA in the next two years.

Earlier, ACL also announced that the company's board had approved the entering into of an inter-corporate deposit agreement with Sanghi Industries Limited to provide an unsecured intercorporate deposit of up to Rs 300 crore in one or more tranches for general corporate purposes.