JSW Cement, the building-materials arm of India’s JSW Group, a prominent steel producer, is reportedly in preliminary discussions with German cement company Heidelberg Materials to acquire its cement businesses in India, which have an annual production capacity of 13.4 million tonnes.
Sources within the industry have disclosed that discussions between JSW Cement and Heidelberg began after JSW Group made an unsolicited offer to acquire Heidelberg’s Indian entities, primarily operating in peninsular India.
It’s important to note that Moneycontrol has not independently verified this report.
India’s building materials industry is heavily regional and relies on transportation logistics due to the country’s vast size. In mergers and acquisitions within the sector, enterprise valuation multiples are often influenced by proximity to end-consumption markets.
This potential exit of Heidelberg Materials from India follows Holcim Group’s departure in 2022. In that case, the Adani Group emerged as the winner in the competitive bidding for Ambuja Cements and ACC, which were divested by Holcim Group. JSW Group also participated in the bidding process.
The future strategy for Heidelberg’s exit from India remains uncertain, as the company may opt for an auction process to sell its assets, potentially attracting more buyers and increased competition for the cement plants. A spokesperson for Heidelberg Materials declined to comment, while the JSW Group did not respond to a request for comment from Economic Times.
Under the leadership of Sajjan Jindal, JSW Group is actively working to transform its cement and ports businesses into profitable ventures, although both have faced delays in the past. While there has been some progress in port operations, the outlook for the cement subsidiary remains uncertain, according to industry experts.
JSW’s cement business had previously planned for an IPO. In past media reports, Parth Jindal, Managing Director of JSW Cement, had mentioned the possibility of listing the cement business in FY20. In a 2019 interview with Business Standard, Parth Jindal had expressed intentions to list the business in 2021. However, the business remains unlisted to date. In August of this year, Parth Jindal announced a revised listing timeline for FY25.
