Ambuja Cements To Acquire Penna Cement For Rs 10,422 Crore To Expand Southern Footprint

Ambuja Cements Ltd. will acquire Hyderabad-based Penna Cement Industries Ltd. at an enterprise value of Rs 10,422 crore, as the Adani Group cementmaker plans to increase its footprint in southern India. Ambuja will acquire 100% shares of PCIL from the promoter group, P Pratap Reddy and family, according to a company statement on Thursday.

The acquisition will be fully funded through internal accruals and the deal is expected to be completed within three to four months.

Existing dealers of PCIL will move to Adani Cement Ltd.’s network for synergy, the company said. The acquisition is expected to improve Adani Cement’s market share pan-India by around 2% and in south India by around 8%.

“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," said Ajay Kapur, chief executive officer of the Adani Group's cement business. "PCIL’s strategic location and sufficient limestone reserves provide an opportunity to increase cement capacity through streamlining and additional investment."

The bulk cement terminals in Pennar will provide access to the eastern and southern parts of peninsular India, apart from an entry to Sri Lanka, through the sea route, he further said.

The acquisition will also strengthen Adani Cement’s sea transportation logistics with five bulk cement terminals at Kolkata, Gopalpur, Karaikal, Kochi and Colombo to serve peninsular India, according to the company.