Gautam Adani's Indian conglomerate has announced its intention to withdraw from its food FMCG joint venture, Adani Wilmar Ltd., developed alongside its Singaporean partner, Wilmar International Ltd. The deal is reportedly valued at $2 billion. Following the announcement, Adani Enterprises Limited (AEL) saw a 3 percent drop in its shares on Indian markets after agreeing to sell its full 44 percent stake in the joint venture through a multi-phase deal.
Adani Wilmar's stocks experienced a decline of 6.5 percent on the Bombay Stock Exchange and 6.3 percent on the National Stock Exchange. As of December 27, the market capitalization of Adani Wilmar was approximately INR 42,785 crores, or $5 billion.
This decision aligns with the Adani Group's strategic pivot towards its primary focus on infrastructure sectors. The proceeds from the sale are intended to accelerate investments in core infrastructure areas such as energy, utilities, transport, logistics, and related industries.
AEL has reiterated its ongoing commitment to strengthening its position as a leading incubator of infrastructure platforms in India by continuing investments in this sector.
Adani Wilmar, recognized as India's largest edible oil and food FMCG company, boasts 24 factories across 15 cities and a robust distribution network of over 10,000 distributors, exporting to more than 30 countries globally.
AEL announced plans to sell approximately 13 percent of Adani Wilmar to meet the minimum public shareholding requirements, with Wilmar International set to acquire around 31 percent of the venture.
The transaction involves AEL, its affiliate Adani Commodities LLP, and Wilmar International's subsidiary Lence Pte. Ltd. Lence will purchase all equity shares in Adani Wilmar held by Adani Commodities, subject to a call or put option, up to a maximum of 31.06 percent of the existing equity share capital of AWL.
Wilmar has also declared that the transaction will involve purchasing up to 403,739,517 equity shares of Adani Wilmar, with the option price per equity share to be mutually agreed upon by the parties, capped at INR305.
Adani Commodities and Lence currently hold 571.02 million equity shares each in AWL, each representing 43.94 percent of the existing equity share capital, amounting to 87.87 percent ownership collectively, while the remaining 12.13 percent is held by public shareholders.
Compliance with the Securities and Exchange Board of India's regulation requires AWL to maintain at least a 25 percent public shareholding.
The completion of the sale is subject to standard conditions, including necessary regulatory approvals. Following the sale, Adani's nominee directors will resign from the Adani Wilmar Board, prompting a name change for the company.
This capital restructuring follows the recent indictment of Adani Group founder Gautam Adani and several top executives in the U.S. for their alleged involvement in a five-year, multi-billion-dollar bribery and fraud scheme linked to plans for a profitable solar power project.
Despite the Adani Group's denial of the accusations made by the U.S. Securities and Exchange Commission and the Department of Justice, the allegations significantly impacted the stock value of Adani group's publicly traded companies.
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