India’s Adani Builds Cement Empire With $10.5 Billion Deal

India’s cement sector has significant room to grow, Adani Group said in a statement late Sunday, pointing to the country’s rapid urbanization. It said Indian cement use per head, at 242 kilograms, was less than half the global average, and China’s total consumption was more than seven times India’s.

“Our move into the cement business is yet another validation of our belief in our nation’s growth story,” Mr. Adani said in the statement. The company said the deal, if successful, would be the largest-ever takeover in India’s infrastructure-and-materials sector.

Holcim said it would receive cash proceeds of about 6.43 billion Swiss francs, equivalent to $6.42 billion, for selling stakes in its

Ambuja Cements Ltd.

and

ACC Ltd.

, which is a subsidiary of Ambuja. Holcim owns 63.2% of Ambuja and a direct stake of roughly 4.5% in ACC.

India will be one of the world’s fastest-growing economies this year, as the government spends billions of dollars on building infrastructure, and demand revives as the economic effects of the Covid-19 crisis recede. The International Monetary Fund expects Indian gross domestic product to grow 8.2% this year.

Optimism about the outlook for Indian housing and infrastructure has already helped spur another megadeal. Last month,

Housing Development Finance Corp.

and its affiliate

HDFC Bank Ltd.

agreed to combine in a share-based transaction, creating a financial giant that aims to ride a surge in demand for housing in India.

Mr. Adani vies with

Mukesh Ambani

of

Reliance Industries Ltd.

for the title of India’s richest man. Forbes estimates his net worth at about $90 billion, against $90.7 billion for Mr. Ambani.

His unlisted Adani Group has business interests in sectors ranging from logistics to real estate and energy, with several listed subsidiaries such as Adani Enterprises Ltd.,

Adani Power Ltd.

and Adani Ports & Special Economic Zone Ltd.

Shares in Ambuja rose 2.9% to 369.20 Indian rupees per share by early afternoon in India, below the 385 rupees per share that Adani is offering. Holcim stock declined 0.7% in Monday morning trading.

Adani Group and Holcim said they expect the deal to close in the second half of the year.

Write to P.R. Venkat at [email protected]