Adani Enterprises to exit Wilmar JV in $2 billion deal, invest proceeds in 'core infrastructure'

Adani Enterprises to sell up to 13% the Adani Wilmar, fully exit the platform

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Adani Enterprises (AEL) has fully exited the Adani Wilmar JV, selling its 13% stake to meet the minimum public shareholding norm, with the rest of the 31% stake going to Singapore's Wilmar International, a company filing informed stock exchanges on December 30. The divestment will raise proceeds worth over $2 billion, which Adani Enterprises said would be used in 'core infrastructure platforms'.

Adani Enterprises, Adani Commodities LLP (ACL) and Wilmar International's subsidiary Lence entered into an agreement, as per which Lence will acquire 31.06% stake in Adani Wilmar held by ACL, said the company statement. Wilmar will acquire Adani's remaining 31% stake at a price not more than Rs 305 per share, and the deal is to be closed by March 2025.

The other part of the transaction involves Adani Enterprises divesting around 13% of its stake in Adani Wilmar through an OFS, to achieve compliance with minimum public shareholding requirements.

With this, AEL will be selling a total of 44% stake in Adani Wilmar as part of the exit, and Wilmar International will acquire up to 31% held by Adani Enterprises in Adani Wilmar, said the statement. "...with the completion of these two legs, AEL would completely exit its ~44% holding in Adani Wilmar," it added.

Adani’s nominee directors will be stepping down from the Board of Adani Wilmar, and shareholders have also agreed to take further steps to change the name of the company to 'AWL Limited' or 'AWL Agri Business Limited' or 'Fortune Agri Business Limited', or such other name as approved by the Ministry of Corporate Affairs.

Shares of Adani Enterprises ended the trading session very strong, near the high of the day, gaining by over 7%.

This is the first major transaction by the Adani Group since the DoJ indictment in November. Funds raised from the proceeds will be used by AEL to 'turbocharge its investments in the core
infrastructure platforms in energy & utility, transport & logistics and other adjacencies in primary industry,' said the company.

"AEL will continue to invest in infrastructure sectors which will further strengthen AEL’s position as India’s largest listed incubator of platforms playing the key macro themes underpinning India’s growth story," Adani Enterprises said in the statement.

Adani Group and Wilmar International were in possession of almost 44% each in Adani Wilmar, and this 88% overall shareholding needed to be brought down to 75% by February, when the three-year grace period was scheduled to lapse.

Read More: Track Adani Wilmar's September quarter earnings here

Adani Enterprises and Wilmar are the founder shareholders of Adani Wilmar, jointly building the FMCG franchise in India. Adani Wilmar is a leading consumer company with 100% urban coverage and presence in over 30,600 rural towns, with exports going to over 30 countries. In January 2022, Adani Wilmar had launched its initial public offering (IPO), and the funds raised were used to strengthen manufacturing capabilities and to expand product portfolio. Adani Wilmar had market capitalization of Rs 42,785 crore.

Before this transaction, Adani Enterprises had raised $500 million in October. Other group companies including Adani Energy Solutions, Adani Green Energy, Ambuja Cement too have raised funds totalling up to around $4.5 billion.