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Ambuja Cements, owned by the Adani Group, has signed a binding agreement to acquire Penna Cement Industries Ltd (PCIL) at an enterprise value of Rs 10,422 crore. The acquisition will give Ambuja 100% ownership of PCIL, which is currently held by its promoter group, P. Pratap Reddy and family.
The move is a significant step in Ambuja Cements' growth strategy, as it will expand the company's market presence in South India. PCIL has 14 MTPA cement capacity, of which 10 MTPA is operational, and the remaining is under construction. The acquisition will increase Adani Cement's market share in India by 2%, and in South India by 8%.
The acquisition will be fully funded through internal accruals. Ambuja Cements CEO & Whole Time Director Ajay Kapur said, 'This landmark acquisition is a significant step forward in Ambuja Cements' accelerating growth journey.' He added, 'By acquiring PCIL, Ambuja is poised to expand its market presence in South India and reinforce its position as a pan-India leader in the cement industry.'
The indicative time period for completion of the acquisition is 3-4 months. The consolidated turnover of PCIL for the last three years i.e. FY2023-24, FY2022-23 and FY2021-22 is Rs 1241 crore, Rs 2002 crore and Rs 3204 crore, respectively.
Source: Ambuja Cements to acquire 100% stake in Penna Cement for Rs 10,422 crore