Adani, JSW groups submit non-binding bids to acquire Ambuja Cements

Holcim intends to close the transaction early

Adani and JSW groups submitted non-binding bids to acquire Ambuja Cements last week. Both groups have tied in their funding with a clutch of private equity (PE) firms and offered timelines to close the transaction at the earliest, said a banker privy to the deal.

Aditya Birla Group’s UltraTech Cement has also entered the race. Closure of the deal, however, is expected to be delayed by UltraTech as approvals from the Competition Commission of India take time. Ambuja Cements’ Swiss promoter Holcim has indicated it wants to close the transaction early.

“The non-binding bids will be judged on two counts: one, the cash offer, and two, the time taken to close the deal. Even if an offer is higher and it takes more time to get approvals from government authorities, it will not be preferred,” said the banker.

JSW Group has tied up with a few PE funds, led by Apollo Global Management, to make the acquisition.

Adani Group’s offer is backed by its own cash and a few sovereign funds based in the Gulf. Once the non-binding bid is accepted, Holcim will enter into exclusive talks and give the winner access to the data room, said the banker quoted earlier.

Goldman Sachs is running the sale process on behalf of Holcim.

An announcement is expected to be made by Holcim as early as this week, when its shareholders are expected to meet for their annual meeting on May 4.

“No one knows what the final cost of the acquisition will be, although taking into account the current market price, the base price will be at least Rs 76,000 crore, including open offers,” said the banker.

Bankers are, however, expecting an aggressive bid from Adani Group, which wants to make a foray into the cement industry.