|
INDIA
BUSINESS WORLD -
JANUARY 2006
THE MONTH THAT WAS
HOLCIM ACQUIRES 14.8% IN GACL
The era of big-ticket deals has arrived in India , with global giants roaming the Indian landscape for deals that should give them access to one of the world's fastest growing economies. In one of the most expensive deals in the global cement industry, the world's second largest cement maker, Holcim, has acquired a 14.8% stake in Gujarat Ambuja Cement (GACL) for Rs 2,142 crore ($476 million) and offered to buy another 20% for Rs 2,520 crore ($560 million).
Holcim said its offer for 20% more of GACL would be at Rs 90 per share.
Holcim has paid $206 per tonne cement to GACL more than double the $100 it had paid to acquire 34% equity in Associated Cement Companies (ACC), India 's number two cement producer.
The price is phenomenal and it may set a benchmark in the Indian cement industry, said one industry official. In the next few years, India may become a net importer, which would give a boost to Holcim's plans, he added.
The move marks the Swiss firm's latest foray into the world's second-biggest cement market, where planned new capacity cannot keep up with demand, seen growing at 10%. Holcim joins Vodafone, Oracle and Standard and Poor's among MNCs that have struck large deals to buy into Indian companies in the recent past.
Gujarat Ambuja, India's third-biggest cement maker with a 13-million-tonne capacity, said today its founders the Sekhsaria and Neotia families had sold 20 crore shares at Rs 105 each, including a non-compete fee of Rs 15 per share, at a 14% plus premium to Gujarat Ambuja's Friday close. The founders held 23.8% of GACL before the sale.
Post-sale the founders stake has come down to 9%. Founded 25 years ago, Gujarat Ambuja is India 's third-biggest cement maker with a capacity to turn out 13 million tonnes a year. No details were disclosed about which promoter sold how much. It is believed that the Sekhsaria family holds a much larger chunk of the 23.8% held by the promoters. |
