Ambuja Cements shares opened strong on Monday, rising over 1 percent, while HeidelbergCement India stock jumped over 13 percent after a news report said that the Adani Group is in discussions to acquire HeidelbergCement India and Zuari Cement from the German parent firm. The acquisition could be valued at around Rs 10,000 crore, reported The Economic Times, citing unidentified sources.
At open, Ambuja Cements’ share price was trading at Rs 619.35, up 1.4 percent from its previous close of Rs 610.7. The stock has jumped over 42 percent in the last year, taking its market capitalization to Rs 1.5 lakh crore. Ambuja Cements' share price has significantly outperformed the benchmark NSE Nifty 50, which has gained 28 percent during the period. As of June 30, 2024, the company had cash and cash equivalents of Rs 18,299 crore.
HeidelbergCement India’s stock jumped to Rs 219, marginally higher from Friday’s closing of Rs 219. The stock has risen 16 percent in the last year, with its current market capitalization at about Rs 5,000 crore. It has underperformed the Nifty.
The Indian cement sector has been witnessing heightened merger and acquisition activity, with major players Ambuja Cements and UltraTech Cement aggressively acquiring smaller players.
This potential acquisition is expected to significantly boost Ambuja’s production capacity from the current 89 million tonnes, as the Adani Group firm targets a capacity of 140 million tonnes by 2028. The buyout would bring Heidelberg Cement India’s 14 million tonnes of production capacity and Zuari Cement’s 7 million tonnes under Ambuja Cements’ umbrella.
The Economic Times report added that the Adani Group might back out if the process becomes a full-fledged bidding war. Earlier, last week, another news report said that other major contenders like UltraTech Cement and JSW Cement may enter the fray to acquire HeidelbergCement India.
This is not the first time the idea of HeidelbergCement’s India operations changing hands has surfaced. Exactly a year ago, in October 2023, reports indicated that UltraTech Cement and JSW Cement were also interested in acquiring Heidelberg’s Indian assets.
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