That’s a million-dollar question… or should we say a 10 billion-dollar one, as that is the estimated size of the deal in the ACC and Ambuja bidding war that the Indian cement industry is witnessing.

The cement sector has been in the news since the beginning of the year for cost inflation and the corrections there of. But the impending exit of the Switzerland-based building materials conglomerate Holderind Investments Ltd (Holcim) and the upcoming stake sale in Ambuja Cements and ACC has captured the headlines and imagination of the media. Speculations are rife as contenders are heating up the bidding game in what is turning out to be a game changing manoeuvre.

Holcim Group’s global cement capacity as of the current financial year is 293 mtpa with around 24 per cent of its total capacities housed in India. Ambuja’s
current reported grinding capacity is 31.4 mtpa with plans to expand capacity to 39.9 mtpa by 2024, while ACC’s has been calculated at 34.9 mtpa to be increased
to 39.7 mtpa by the first half of the next year. The company that bags the deal will have a combined pan-India capacity of 66 mtpa, changing the global order.
Sweden, where Holcim is based, has the highest carbon tax rate worldwide at $137 per metric tonne of CO2 equivalent. Earlier this year, Holcim sold several of
its assets in Indonesia, Malaysia and Brazil. The company’s disinvestment in India is in tune with its sustainability strategy to reduce its cement business to around
35 per cent of revenue in 2025, in a bid to lower its carbon footprint. It has even joined the Science-Based Targets initiative detailing its net-zero pathway to 2050.
Holcim would be a torchbearer in ESG within the building material industry. Players like Adani and JSW are leading the race to buy Holcim’s Indian prized assets
including others such as Shree Cement and RS Damani of D Mart making some efforts to explore the deal.

There are two strong plot lines that are emerging from this scenario. One: How will the bidders raise the capital for the buyout and what what is government likely to do, are questions that will lead economic reform discussions in time to come.