BENGALURU (Reuters) -The Adani Group is in talks to buy the Indian cement operations of Germany’s Heidelberg Materials in a deal that could be worth about $1.2 billion, the Economic Times newspaper said on Monday, citing people familiar with the matter.
Led by billionaire Gautam Adani, the group entered India’s cement industry in 2022 by buying Holcim’s local units and has made a string of acquisitions since, as it jostles for market share with top producer UltraTech Cement.
The Adani Group did not immediately respond to Reuters’ requests for comment. Heidelberg Materials declined to comment.
Shares of its Indian unit, HeidelbergCement India, were up 14.5% on Monday, off an earlier high of 18%, for a market valuation of 56.63 billion rupees ($675 million).
Shares in parent Heidelberg Materials were also set to open 1.2% higher in pre-market trade in Frankfurt.
In July, Chief Executive Dominik von Achten said the group’s market position in India was “not perfect yet” and it was looking at all options, adding that the market faced a trend of consolidation.
The number of deals in India’s cement industry has grown since Adani’s foray, as government spending has boosted demand from housing and infrastructure.
The Adani Group would drop out of the race if it drew in other contenders, the Economic Times cited one of its sources as saying.
Last year, the Hindu BusinessLine reported that UltraTech and IPO-bound JSW Cement were also in the race for HeidelbergCement India.
Heidelberg Materials, which entered India in 2006 with a series of domestic acquisitions, now has four plants with an annual capacity of 12.6 million tonnes, it says on its website.
Increased competition over the last few quarters has cut into market share in its mainstay central India market.
HeidelbergCement India posted its first profit drop in five quarters in the three months to June as sales volume declined and a price cut weighed.
The company sells two brands of cement, Mycem and Zuari.
($1=83.9580 Indian rupees)
(Reporting by Chris Thomas and Nandan Mandayam in Bengaluru; Additional reporting by Christoph Steitz; Editing by Mrigank Dhaniwala and Clarence Fernandez)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.