If all of the deals go through, Adani will become India's second biggest cement producer. Image Credit: Reuters

Mumbai: Adani Group has received regulatory approval for a Rs301 billion ($3.8 billion) open offer to buy remaining shares of two Indian cement makers, following Holcim’s decision to sell its majority stake in May to the conglomerate.

The group, led by Asia’s richest person Gautam Adani, is set to make an offer to buy 26 per cent of Ambuja Cements for Rs385 per share and the same stake for Rs2,300 per share of ACC after getting a nod from Securities & Exchange Board of India.

Adani’s cement deal

Indian stock market rules say that acquiring 25 per cent or more of the shares in a local listed firm will trigger a mandatory open offer where minority shareholders can choose to sell their stakes to the new investor at a predetermined price. Adani’s open offer price for Ambuja is at 6 per cent discount compared to Thursday’s closing price while that for ACC is at a 1 per cent discount, data compiled by Bloomberg show.

The deal was also cleared by India’s antitrust regulator last week. The Holcim transaction is set to propel the Adani Group to become India’s second-largest cement producer virtually overnight in what’s an extremely fragmented and competitive market.

Holcim in May agreed to sell its 63 per cent stake in Mumbai-listed Ambuja Cements to Adani Group, which said then that it plans to spend to spend about $10.5 billion on the stake purchases and open offer consideration for Ambuja and related entities. As part of the deal, Adani will inherit Ambuja’s controlling stake in another publicly traded cement producer, ACC, and will buy Holcim’s direct 4.5 per cent holding in the unit.