India's Ambuja Cements said on Thursday that it has acquired Penna Cement Industries for an enterprise value of 104.22 billion rupees ($1.25 billion).
The buyout is aimed to help boost the Adani group company's presence in the country's south and better compete with market leader UltraTech Cement, which in 2023 bought Kesoram's cement assets in a bid to bolster its foothold in the region.
Ambuja Cements said in a statement that the deal will improve Adani Cement's pan-India market share by about 2% and in south India by about 8%.
The deal will give Ambuja Cements access to Penna's operational facilities in Andhra Pradesh and Telangana, and under-construction facilities in Rajasthan, totalling to 14 million tons per annum (MTPA).
The company will fund the transaction through internal accruals, it said in a statement.
The move comes at a time when Indian cement makers are looking for ways to ramp up production and meet demand for the construction material amid upbeat housing momentum and strong government spending on infrastructure.
