Ambuja-ACC deal: Cost synergies seem to justify premium deal valuation

But, whether players maintain discipline or turn aggressive on pricing as new capacities come on stream will be crucial

The Adani group’s deal to buy Ambuja Cements (ACEM) and by extension, ACEM’s stake in ACC has triggered open offers for additional stakes in both companies. The deal, including open offers, should be worth something more than $10 billion and given the approximate 73 MTPA of capacity, the valuation would work out to around $170-180 per tonne. MTPA is million tonnes per annum. The deal is going through at around 8 per cent premium to market price. Given the deal ramifications and the open offers, it will take about 6-9 months to complete the formalities.

The Adani Group therefore becomes