Adani Group gets approval for $3.8 billion open offer for Ambuja, ACC

The Adani Group, led by billionaire Gautam Adani, has received capital markets regulator Securities and Exchange Board of India’s (Sebi) approval for a $3.8-billion (Rs 31,139 crore) open offer for Ambuja Cements and ACC. This will be the largest open offer in India's corporate history, which will launch on August 26, concluding on September 9.

The mandatory open offer, triggered after Adani's acquisition of Swiss major Holcim's stakes in Ambuja and ACC respectively in May, will see the group offer Rs 385 per share for 26 per cent stake in the former and Rs 2,300 a share for a similar stake in the latter. 

Adani’s open offer price for Ambuja is at a 6 per cent discount compared to Thursday’s closing price, while that for ACC is at a one per cent discount, data from BSE shows. On Friday, Ambuja closed trade 2.56 per cent up on the BSE, at Rs 420.10 a share. ACC, on the other hand, closed trade 1.12 per cent up on the BSE, at Rs 2,351.60 a share. 

According to Indian stock market rules, acquiring 25 per cent or more of the shares in a local listed company will trigger a mandatory open offer where minority shareholders can choose to sell their stakes to the new investor at a predetermined price. 

Prior to Adani's open offers, Unilever's voluntary open offer for 22.52 per cent stake in Indian subsidiary, Hindustan Unilever, in 2013, was the largest to date at Rs 29,220 crore in terms of size. While Vedanta Resources' bid to increase stake by 17.51 per cent in metals and mining company Vedanta at Rs 15,299 crore in 2021 was the second-largest in terms of size. This was also a voluntary open offer. 

According to a regulatory filing, Endeavour Trade and Investment, a Mauritius-based entity owned by the Adani family, will invest Rs 19,880 crore to buy 516.3 million shares of Ambuja Cements. While the entity will invest Rs 11,259 crore to buy 48.9 million shares of ACC. 

Post a successful open offer, Adani’s stake in Ambuja will rise to 89.11 per cent and in ACC to 80.53 per cent.

ICICI Securities Ltd and Deutsche Bank AG are advising the Adani Group on the open offer. The deal was also cleared by the Competition Commission of India (CCI) last week.