Holcim Ltd. (SWX:HOLN) may exit India, seventeen years after it entered the country, putting its twin listed arms Ambuja Cements Limited (BSE:500425) and ACC Limited (NSEI:ACC) up for sale, as part of a global strategy to focus on core markets, said multiple people aware of the decision. Holcim is believed to have held early-stage negotiations with JSW Group and Adani Enterprises Limited (BSE:512599), among others, to explore their interest levels. Both are recent entrants in the cement sector but have aggressive plans to ramp up.

Sources in the know said feelers have also been sent to regional cement operators like Shree Cement Limited (NSEI:SHREECEM). Global cement companies who have circled around India for long are also expected to be tapped, since taking over both Ambuja and ACC will catapult any player to the second position with a combined pan India capacity of 66 million tonnes per annum in the highly competitive, fragmented and price sensitive market. Holcim that globally merged with Lafarge in 2015 to create a mega entity LafargeHolcim was forced to go through several restructurings to comply with anti-trust regulators around the world, by divesting assets across Europe and Asia, including India.

The combined entity has since been rebranded as Holcim Group. Holcim's entity in India is Ambuja Cement where, as promoters, it owns 63.1% via Holderind Investments Limited. Ambuja Cement in turn owns 50.05% of ACC Ltd. Holderind Investment (Holcim) owns another 4.48% in ACC directly.

Since 2018, Holcim has tried to streamline operations by merging the two operations for maximum cost and operational efficiencies, but that process is still incomplete. As on April 13, 2022, the combined market capitalisation of the two companies is INR 1,140 billion ($15 billion) with Ambuja alone being at INR 733.49 billion ($9.7 billion), making it arguably one of the largest potential M&As in India. Any potential transaction will also trigger an open offer in both for an acquisition of an addition 26%.

Shares of Ambuja has risen 16% since April 6, possibly in anticipation of a mega deal, while ACC gained 2% in the same period. On April 13, 2022, Ambuja shares closed at INR 369.40 per share, up 2.6% and ACC at INR 2207.15 per share, up 1.16%. Holcim's head of media relations in its headquarters Zug, Switzerland, said "we do not comment on rumours".

JSW declined to comment. Adani did not respond till press time. Calls and messages to HM Bangur, Managing Director, Shree Cement did not generate a response either.