The acquisition will result in the creation of India’s second largest cement maker
Ambuja Cements has announced that it has acquired Sanghi Industries in a deal worth US $600mn. The deal makes the company India’s second largest cement maker.
The firm said it is acquiring 57% of the shares in Sanghi from its family owners, with the company valued at around $600mn after taking into account debt and liquid assets. Sanghi has India’s largest plant for cement and clinker and produces approximately six million tonnes of cement per year.
According to a report in the Financial Times, the deal is leveraging the firm’s own cash, as opposed to taking on debt to complete the transaction.
“We are optimistic about the acquisition by Ambuja Cements, recognising it as a mutually beneficial opportunity for both of the shareholders,” said Ravi Sanghi, Sanghi Industries’ Chair and Managing Director.
India’s cement market is expected to increase due to Narendra Modi’s drive to improve infrastructure.
Ambuja Cements, which is owned by the Adani Group, said it aimed to increase Sanghi’s production to 15m tonnes per year. Its current assets produce 67.5m tonnes a year, with a target of 140m tonnes by 2028.