India's biggest cement maker passed on an opportunity to become even bigger when Holcim Group put up two of its leading cement companies for sale.
“I don't think this deal makes sense for us financially,” said Kumar Mangalam Birla, chairman of Aditya Birla Group—the owner of UltraTech Cement Ltd. “I think we have better options of growth,” he told BQ Prime's Menaka Doshi on the sidelines of the World Economic Forum 2022 summit at Davos.
Billionaire Gautam Adani acquired Ambuja Cements Ltd. and ACC Ltd. held by Holcim. The value for the Holcim stake and open offer consideration for the cement companies is nearly $10.5 billion (about Rs 81,400 crore).
“Price is in the eyes of the beholder. For us, I don't think we could have created value as much as we can in other options that we're looking at,” Birla said.
“We are sort of entrenched in the business in a very positive way. We have been in the business for several decades now. We are very entrenched with the channels that form the ecosystem of the business,” Birla said. “We have a large market share, our brand commands a premium, is loved by consumers, and we have our own plans that we intend to go ahead with, as we would have even otherwise. It's always good to have competition. We have been used to competition.”
Birla, however, said UltraTech's plans won't change due to Adani's entry. “I don't think we are going to start bidding for assets much more aggressively only because there's a new entrepreneur in the sector. That's not how it works for us. It must create value.”
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