Holcim's proposed acquisition of a controlling stake in the Associated Cement Companies and Ambuja Cement Eastern Ltd will help the world's second largest cement maker have the largest country presence in India.
If Holcim's attempt to wrest control over ACC fructifies, the Swiss company will have a 20.2 million tonne per annum capacity in India, 3.5 million tpa more than its capacity in the United States of America.
ACC, India's second largest cement company after the Aditya Birla group, has a 18.3 million tpa capacity. ACEL has a capacity of 2 million tpa.
In addition, a successful acquisition of the controlling stake in ACC will help Holcim wrest the numero uno position in the world's pecking order, in terms of capacity, replacing French giant Lafarge.
The acquisition would take Holcim's capacity to 165 million tpa, 15 million tpa more than Lafarge.
Holcim will land up with having a 13.8 per cent share of the Indian cement market, assuming that it manages to acquire the controlling stake in ACC.
A recent study ASK Raymond James, a Mumbai-based brokerage, has commented that the acquisition will help the foreign companies to grab a 19 per cent share of the domestic market.
Two global majors, namely Lafarge and Italcementi, have a market share 3.2 per cent and 2 per cent, respectively.
In the Asia-Pacific region, where Holcim has a presence in 10 countries, its capacity will go up by 56 per cent to 56.2 million tpa, post acquisition of ACC.
In the Asia-Pacific market, its sales stands at 29.3 million tpa and an average market share of around 24 per cent in these countries. Its capacity in the region is 36 million tonne per annum.
Holcim has a 30.3 per cent share of the European market with a 44 million tpa capacity, a 14.7 per cent share of North American market with a 21.3 million tpa. It grabs 21.3 per cent share of Latin American cement market with a 31 million tpa capacity.
Its market share in the combined African and the middle east market is 8.9 per cent (12.9 million tpa) and 24.8 per cent share in Asia Pacific( 36 million tpa), the study says.
The Swiss cement maker has signed a deal with Gujarat Ambuja Cement late last month to acquire a 67 per cent stake in Ambuja Cement India Ltd, the investment arm that holds a 13.8 per cent stake in ACC and a 94 per cent stake in Ambuja Cement Eastern.
Holcim, along with Gujarat Ambuja Cement, has made an open offer to acquire up to 50.1 per cent stake in ACC, through Ambuja Cement India Ltd. The open offer is priced at Rs 370 per share.
As part of the arrangement with Gujarat Ambuja, Holcim will hold a majority 67 per cent stake in ACIL. Holcim, through ACIL has also made an open offer to acquire the balance stake in the 2 million tonne per annum cement company, Ambuja Cement Eastern, in which ACIL currently holds around 94 per cent.
