India's Adani-backed Ambuja Cements buys stake in Sanghi Industries for $604 mln (updated)

Sanghi Industries

03/08/2023 04:49

(Adds deal details, background from paragraph 2)
       BENGALURU, Aug 3 (Reuters) - India's Ambuja Cements
 ABUJ.NS  said on Thursday it has bought a 56.74% stake in
smaller rival Sanghi Industries  SNGI.NS  at an enterprise value
of 50 billion rupees ($604.4 million), closing the Adani Group's
gap on market leader UltraTech  ULTC.NS  at a time of booming
demand for building materials.
    The deal is the billionaire Gautam Adani-led conglomerate's
first major acquisition this year after a report by short-seller
Hindenburg Research in January slammed the group shares and led
to investigations into the group.
    Ambuja will acquire a 56.74% stake in Sanghi for 16.74
billion rupees ($202.4 million), and launch an open offer for a
further 26% stake at 114.22 rupees per share, a 13.8% premium to
Sanghi Industries stock closing price on Wednesday.
    Adani Group bought Holcim AG's  HOLN.S  cement businesses in
India last year – Ambuja Cements and ACC Ltd  ACC.NS  – for over
$10 billion in its largest-ever acquisition.
    With the Sanghi Industries acquisition, Ambuja Cements'
capacity will increase to 73.6 MTPA, the company said in a
regulatory filing.
    There has been strong demand for cement in India as the
government has increased its infrastructure projects and due to
the strong demand for residential houses, albeit in the luxury
sector. The cement sector grew 9.4% in June.
    Ambuja has posted a 29% rise in its April to June-quarter
profit, excluding dividend income, boosted by demand for its
premium cement products.

($1 = 82.7200 Indian rupees)

 (Reporting by Indranil Sarkar and Kashish Tandon in Bengaluru;
Editing by Sonia Cheema and Savio D'Souza)
 ((Indranil.Sarkar@thomsonreuters.com; Mobile:  +91
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