Adani Group, run by Gautam Adani, India’s second richest man, has completed its acquisition of SB Energy India for US$3.5 billion, the largest acquisition in the renewable energy sector in the country.
It is an all-cash deal and the definitive agreements were signed on May 18, 2021.
SB Energy will now be a 100% subsidiary of Adani Green, the renewable energy arm of the Adani Group. Prior to this, it was an 80:20 joint venture between Japan’s SoftBank Corporation and Bharti Group.
Adani Group has ambitious plans in the renewable energy sector and the chairman recently announced they will invest $20 billion during the next 10 years in this segment.
SB Energy entered the Indian market in 2015 and had been looking to sell its portfolio for close to two years. Talks with Adani Green gained traction after negotiations with the Canadian Pension Plan Investment Board broke down over differences in evaluations.
The SoftBank-promoted company has 5 gigawatts of renewable assets across four states in India. The portfolio holds 1,700MW of operational renewable assets, 2,554MW of assets under construction and 700MW of assets near construction.
Solar capacity accounts for 84% of the portfolio (4,180MW), wind-solar hybrid capacity accounts for 9% (450MW) and wind capacity accounts for 7% (324MW).
The conglomerate has the twin distinction of being the largest private power producer from coal-fired stations and renewable sources. However, it has now set an ambitious plan to pivot toward renewable energy.
Adani plans to triple renewable energy capacity over the next four years, and to power all data centers with renewable energy. It aims to turn its ports net-zero by 2025.
The Adani Group has been rapidly expanding its footprint in diversified sectors, including airport business and data centers. One of his recent big-ticket purchases is a 74% stake in Mumbai international airport, which he acquired in September 2020.
The shares of several Adani Group companies, including Adani Enterprises and Adani Ports and Special Economic Zone, have surged over the past year amid the pandemic.