According to persons familiar with the situation, billionaire Gautam Adani’s Adani Group is in advanced talks with debt-ridden Jaiprakash Power Ventures Ltd. to buy its cement unit. The ports-to-power mixture could spend around 50 billion rupees ($606 million) for a cement grinding machine and other minor assets. While conversations are progressing, they might yet be delayed or fall apart, according to the sources.
The deal will help consolidate the Adani Group’s sudden dominance in the cement sector, which started after it bought Ambuja Cements Ltd. and ACC Ltd. in May from Switzerland’s Holcim Ltd., becoming India’s second-largest cement maker virtually overnight with an installed production capacity of 67.5 million tons annually. Adani Group representatives declined to comment. Jaiprakash Associates representatives were not immediately available for comment. The cement grinding facility has a capacity of 2 million tons a year It began operating in October 2014, in Nigrie in the central Indian state of Madhya Pradesh.
According to a stock exchange filing Monday, Jaiprakash Associates’ board of directors has agreed to divest the company’s “major” cement business in order to reduce debt. Separately, Jaiprakash Power Ventures announced that its board of directors is looking to sell the Nigrie cement grinding facility as well as other non-core assets, but did not name any potential bidders. Adani Group announced last month that it wants to increase its cement production capacity to 140 million tonnes in five years and to invest 200 billion rupees in its recently acquired cement company.