JSW Group to make $7 bn bid to buy Holcim’s India biz

Switzerland’s Holcim will review bids from both Adani and JSW, but a deal would depend not just financial but on other contractual terms, one of the sources and another person said.
JSW Group to make $7 bn bid to buy Holcim’s India biz
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NEW DELHI: JSW Group plans to compete aggressively with Adani Group for assets of Holcim AG’s local cement businesses, two sources said on Tuesday, setting the stage for a bidding battle to become the country’s second-biggest player in the industry.

The steel-to-cement JSW Group’s chief Sajjan Jindal said on Tuesday it would make a $7 billion bid for Holcim subsidiaries Ambuja Cements Ltd and ACC Ltd, as per a report.

But a source with direct knowledge said the deal value could go much higher, even double, as both JSW and Adani, run by India’s richest man Gautam Adani, chase ready-made assets that will immediately give the winner a big presence in the market.

India is the second largest cement producer in the world and accounts for more than 7% of the global installed capacity, according to government data.

JSW Group, Adani, Holcim, Ambuja Cements and ACC did not immediately respond to requests for comment.

JSW has said it will offer $4.5 billion in its own equity and $2.5 billion from undisclosed private equity partners for the bid. Ports-to-coal group Adani is planning its cement foray by acquiring the Indian companies.

Switzerland’s Holcim will review bids from both Adani and JSW, but a deal would depend not just financial but on other contractual terms, one of the sources and another person said.

Once the deal talks progress with a company, Holcim is determined to insert a break-fee clause to get “high” compensation if the transaction fails, said one of the sources. Holcim has been trying to diversify away from its core business of cement and aggregates to focus more on building technology amid increased emphasis on sustainability.

Ambuja and ACC have a combined capacity to make at least 66 million tonnes a year, with plans to expand. Any buyer of the two companies will become the second-biggest player in the country after UltraTech Cement’s 120 million tonnes.

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