Indian steel manufacturer Sajan Jindel’s JSW Group will make a $ 7 billion bid for Holcim’s subsidiaries in India, with Swiss cement group seeking to sell international assets.
Jindel said in an interview that JSW will offer $ 4.5 billion in its equity and $ 2.5 billion from unknown private equity partners for the Indian assets of Holcim Ambuja Cement and ACC.
The JSW chairman said the acquisition of 63% of Ambuja would be “secondary game”.
If the deal succeeds, it will increase JSW’s market share in the Indian cement market from about 3% to 16%, analysts said.
“This merger and acquisition opportunity is one opportunity in a decade,” said Somengal Nabatia, senior vice president of metals, mining and cement at Kotak Securities.
Jindel is reportedly dealing with other powerful Indian conglomerates, including the Birla and Adni families for the cement company, which controls 13% of the Indian market, Nabatieh said, with annual production of 26 million tonnes in 2021.
Shares of Ambuja rose 15% this month to Rs370.43 ($ 4.83). Holmes declined to comment.
JSW’s attempt to expand its cement business comes when India’s largest steel company by market value with last year’s revenue of $ 9.4 billion is working to buy coal mines overseas to offset supply disruptions and high commodity costs.
Rising post-epidemic demand and the Ukrainian war pushed steel production prices to highs, with Australian coke coal reaching $ 590 a tonne in March, according to data provider CoalMint.
“The conflict is affecting world commodity prices and that gives great concern,” Jindel said. “A lot of people put off their projects because everyone feels the cost has gone up by almost 40, 50 percent.”
Jindel said he was lobbying Indian Prime Minister Narendra Modi to develop more coconut deposits, which had been nationalized by 2020.
“Now with prices of this kind, there is a great opportunity and a big incentive for the private sector to go out there and mine this coal and start using it,” Jindel said.
He said he talked to Moody about the issue and said: “We have to import this cooking coal from Australia and Canada and we are sitting on such a large deposit so why do not we start ‘cooking coal’? And he [Modi] I got it right away. “
Jindel added that Moody is “close to any business in India that is growth-oriented, that is nationalistic, that is willing to take big bets in this country, build big industries.”
He said JSW Steel met with Russian coal traders but was not offered a serious discount. “It’s not very attractive to buy from Russia, and then it will also upset our customers in the US and Europe,” he said.
The tycoon described plans to begin mining in Jahariya’s coal fields in the eastern state of Jharkhand.
Jharia is estimated to contain 19.4 billion tons of charcoal cooking, according to JSW, although the site has been controversial because of the poverty and pollution in the communities that live and work on it.
Jahariya is “a crowded area, and the government is also having a very hard time resettling those people and opening those mines,” Jindel said.
JSW said that “the main operational challenge will be the rehabilitation and resettlement of about one million residents”.
JSW’s steel business in India surpassed rival Tata Steel and became the largest at a market capitalization of $ 22 billion, according to the companies’ stock lists. But Jindel said JSW Steel’s two foreign ventures struggled, partly blaming business rivals for influencing governments against them.
“In any country where a foreign company comes to do business, it’s not very easy,” Jindel said, describing his ventures in the US and Italy as “unsuccessful”.
He added that JSW Steel is selling its Italian business, which it acquired in 2018 for 55 million euros. He admitted there would be “some loss, but not a big deal.”
India’s JSW makes $7bn bid for Holcim’s India businesses Source link India’s JSW makes $7bn bid for Holcim’s India businesses