India’s cement giant Ambuja Cements recently disclosed that it had paid $600 million to acquire Sanghi Industries, another key cement producer in the country. The transaction elevates the combined business to the second-largest cement producer in India.
Ambuja Cements announced that it is buying 57% of the shares in Sanghi from its family owners. After deducting debt and cash assets, the company’s value is estimated to be over $600 million. Sanghi produces roughly six million tonnes of cement annually and has the largest cement and clinker plant in India.
India’s Financial Times reported that the deal leverages the company’s own capital rather than using debt to fund the transaction.
Win-win acquisition
“We are optimistic about Ambuja Cements’ acquisition because we see it as a win-win situation for both of the shareholders,” according to Ravi Sanghi, Sanghi Industries’ Chair and Managing Director.
The move comes ibn the backdrop of Indian Prime Minister Narendra Modi’s efforts to enhance infrastructure, which is are anticipated to boost India’s cement sector.
The Adani Group-owned Ambuja Cements declared its intention to raise Sanghi’s production to 15 million tonnes annually. With a target of 140 million tonnes by 2028, its assets currently produce 67.5 million tonnes annually.