JSW Cement has emerged as the third major contender in the race to acquire Orient Cement Limited (OCL), joining industry giants Gautam Adani and Kumar Mangalam Birla.

Both Adani and Birla have been engaged in active discussions with CK Birla, the chairman of the Birla group, since late last year when JP Morgen initiated a sale process.

The three companies previously competed in 2022 for the $6.5 billion acquisition of Holcim’s India assets, a deal that saw Adani triumph and reshape the pecking order in India’s building materials industry. 

OCL’s promoter stake, held by the Birla family and private investment vehicles, stands at 37.9 percent. An acquisition would trigger an open offer for an additional 26 percent stake from minority shareholders. Anticipation of a deal has driven 0CL’s shares up by 56 percent in the past three months, reflecting market expectations of trade as CK Birla’s second generation reportedly shows little interest in running the business. At current market prices, the acquisition of the 63.9 percent stake could amount to Rs.4546.54 crore, with OCL’s total market value pegged at Rs.7115.09 crore.

The protracted negotiations between Adani and Ultratech over valuations and environmental clearances for key limestone mines have opened a window for JSW to enter the fray. Adani’s acquisition of Penna Cement in June and Ultretech’s swift purchase of a majority stake in India Cements have underscored the competitive landscape. 

 

JSW Cement has expressed a strong interest in acquiring Heidelberg’s India assets, Penna and India Cements. However, Heidelberg has been pushing for an equal joint venture, while JSW was on the verge of initiating due diligence for Penna when Adani moved ahead. Orient Cement, a medium-scale asset, has been on JSW’s radar, with recent developments intensifying their efforts. 

JSW Cement plans to list its cement business next year, and acquiring OCL could facilitate a reverse merger, easing the listing process. Despite multiple attempts, CK Birla and Deepak Khetrapal, MD and CEO of OCL, have not commented on the ongoing negotiations. A JSW spokesperson also declined to comment. 

JSW Cement, with a current capacity of 16.6 MTPA, plans to expand to 26 MTPA by FY26 and 50 MTPA by 2030 through a mix of Greenfield and brownfield expansions. Acquiring OCL, which has a significant presence across 11 states and a strong sales footprint in Western and Southern India, would strategically enhance JSW’s capacity and market share.