Adani Group in talks to buy Heidelberg’s Indian cement operations

The Adani Group is in talks to buy the Indian cement operations of Germany’s Heidelberg Materials in a deal that could be worth about US$1.2 billion, the Economic Times newspaper said on Monday (Oct 7), citing people familiar with the matter.

Led by billionaire Gautam Adani, the group entered India’s cement industry in 2022 by buying Holcim’s local units and has made a string of acquisitions since, as it jostles for market share with top producer UltraTech Cement.

The Adani Group did not immediately respond to Reuters’ request for comment.

HeidelbergCement India said in an exchange filing that “the company is unaware about any such development”. Its shares closed 4 per cent higher after jumping as much as 18 per cent earlier in the day.

Heidelberg Materials declined to comment. Its shares were also set to open 1.2 per cent higher in pre-market trade in Frankfurt.

In July, chief executive Dominik von Achten said the group’s market position in India was “not perfect yet” and it was looking at all options, adding that the market faced a trend of consolidation.

Dealmaking has intensified in India’s cement industry since Adani’s foray, as government spending has boosted demand from housing and infrastructure.

The Adani Group would drop out of the race if it drew in other contenders, the Economic Times cited one of its sources as saying.

Last year, the Hindu BusinessLine reported that UltraTech and IPO-bound JSW Cement were also in the race for HeidelbergCement India.

Heidelberg Materials, which entered India in 2006 with a series of domestic acquisitions, now has four plants with an annual capacity of 12.6 million tonnes, it says on its website.

Increased competition over the last few quarters has cut into market share in its mainstay central India market.

HeidelbergCement India posted its first profit drop in five quarters in the three months to June as sales volume declined and a price cut weighed. REUTERS