JSW Cement makes approach for Heidelberg Material's Indian cement operations

JSW Cement, the building materials business of steelmaker JSW Group, is in initial talks with Germany's Heidelberg Materials to acquire the latter's 13.4Mta cement businesses in India, according to The Economic Times of India.

JSW Group has reportedly made an unsolicited offer to acquire Heidelberg Materials' local entities that primarily have capacities in the Indian peninsular. 

The report further added that Heidelberg Materials is yet to make a final call on its India exit strategy and, according to sources, the company may opt for a bidding process to allow other potential buyers to participate in the process.

Heidelberg Materials has more than 13Mta of cement capacity in India, of which 6.3Mta is in the hands of listed entity Heidelberg Materials India, while 7.1Mta is owned by the closely-held Zuari Cement. 

If concluded, the divestment will mark the second exit of a multinational cement producer from India following the departure of Holcim in 2022 (which sold Ambuja Cements and ACC to the Adani Group in a closely contested bidding – and in which JSW Group also participated).

JSW Cement expects to increase its capacity from 19Mta at present to 60Mta in the coming five years, Parth Jindal, managing director of JSW Cement, said in a recent interview. The company aims to be amongst the five largest cement makers in India, he said.