JSW in talks with PE firm to join Holcim cement operations

JSW Group has started a discussion with a private equity company (PE), Carlyle, to join forces and support an offer for Indian Holcim cement operations.

Holcim Group put its arm registered in Ambuja Cement, and ACC Cement sold as part of a global strategy to focus on the core market.

JSW is fundraising Rs 18,750 crore from the PE group as a consortium.

More than one PE group will likely work and bid together with JSW Group.

Apollo Global Management and Synergy Metals Holdings Investasi are the two investors in JSW Cement. Both the companies invested Rs 1,500 crore in July 2021 to accelerate the expansion of their current capacity of 14 million tonnes per year (mtpa) up to 25 mtpa in 2023 on the capex of Rs 3,600 crore.

Along with PE discussions, a $13 billion steel-to-renewables group is also in discussions with global bank clutches for supported financing.

JSW Steel has around Rs 15,000 crore cash as of September 2021, while JSW energy is Rs 754 crore. It further amounted to Rs 136 crore for JSW cement which was not registered at the end of March 2021.

Earlier, JSW Cement had similar support from Bain Capital and CVC Capital Partners for the final round of negotiations to acquire the India Lafarge 11 mtpa portfolio. It was finally outbid by NIRSA.

Other major funds, including Blackstone, Advent International, CVC Capital and Bain, and global sovereign funds, can be approached due to past connections, trends for traditional economic companies and global industrial sector investments.

Another obstacle will be the approval of competition commissions for companies like Ultratech Cement because together with Ambuja and ACC can achieve the dominant market share, and there will be an intense offer for this valuable asset.

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