Adani Group Acquires Orient Cement for $963 Million, Rivalry with UltraTech Grows
Adani Group’s $963 million purchase of Orient Cement intensifies its competition with UltraTech as India’s demand for cement rises
The Adani Group, through its company Ambuja Cements Ltd., has struck a significant deal to purchase Orient Cement Ltd. for 81 billion rupees ($963 million). This acquisition is part of Gautam Adani's strategy to expand his presence in India’s fast-growing cement industry, where competition with UltraTech Cement, owned by Kumar Mangalam Birla, is heating up.
Ambuja Cements will acquire 46.8% of Orient Cement’s shares from its founders and select public investors. Along with that, they plan to make an open offer to buy an additional 26% stake in the company, offering 395.40 rupees per share, which is 12% higher than Orient’s stock price from Monday. The deal will be fully funded by Ambuja’s internal resources, meaning no extra loans or debts will be needed.
Following the announcement, Orient Cement’s stock price jumped by 7.7% on Tuesday, while Ambuja’s stock rose by 2%. The acquisition adds an additional 16.6 million tons of annual cement production capacity to Adani Group, boosting its position in the market where UltraTech Cement currently holds the top spot.
Cement Market War: Adani vs. Birla
This acquisition is the latest move in the ongoing rivalry between Adani Group and UltraTech Cement, as both companies are racing to increase their market share in India’s booming infrastructure sector. Over the past two years, both Adani and Birla have been aggressively acquiring smaller cement companies in a bid to dominate the industry. UltraTech, which currently has an annual capacity of 150 million tons, plans to increase that to 200 million tons by 2027. Meanwhile, Adani Group aims to ramp up its capacity from 79 million tons to 140 million tons by 2028.
Karan Adani, Director of Ambuja Cements and son of Gautam Adani, said Orient Cement’s strategic locations, limestone reserves, and regulatory approvals make it a valuable addition to the company. These assets will help Adani Group meet the growing demand for cement, which is crucial to India’s ongoing infrastructure boom.
India’s Infrastructure Boom Driving Cement Demand
This battle between Adani and UltraTech is unfolding at a time when India is seeing unprecedented growth in infrastructure projects. The government, led by Prime Minister Narendra Modi, is investing heavily in building new airports, power plants, roads, and bridges, with plans to invest 15 trillion rupees by 2026. Cement is a key ingredient in these projects, and the demand for it is soaring.
Adani Group made its big entry into the cement industry in 2022 when it acquired Ambuja Cements and ACC Ltd., instantly becoming India’s second-largest cement producer. While the company faced some challenges in 2023, particularly due to the fallout from a critical report by Hindenburg Research, it has since resumed its aggressive expansion plans. The Orient Cement acquisition is a clear signal that Adani is back on track.
As Adani and Birla continue their battle for dominance, smaller cement companies are likely to become acquisition targets for both. With India’s infrastructure needs continuing to grow, the race to control the cement market is far from over.
