Ambuja Cements, a part of the Adani Group, has received approval for two separate schemes of amalgamation from its board of directors to merge ACC and Orient Cement, paving the way for a pan-India cement powerhouse and a simplified corporate structure for its shareholders.
What are the share-swap ratios under the amalgamation?
The amalgamation, expected to be completed in 12 months, will see Ambuja issue 328 equity shares with a face value of Rs 2 each for every 100 equity shares of ACC with a face value of Rs 10 each, to eligible ACC shareholders. For every 100 equity shares of Orient Cement with a face value of Rs 1 each, Ambuja will issue 33 equity shares with a face value of Rs 2 each, to eligible Orient Cement shareholders.
How does Ambuja expect the merger to improve costs and margins?
Ambuja said the merger will help simplify and rationalise network, branding and sales-promotion spends. It will also optimise costs and improve margins by at least Rs 100 per metric tonne. The initiative aligns with the company’s plan to increase cement production capacity from 107 million tonnes per annum (MTPA) to 155 MTPA by FY28, facilitating efficient capital allocation and faster adaptation to market requirements, the company said in a statement.
What did Karan Adani say about the consolidation?
Karan Adani, non-executive director, Ambuja Cements, said, “This consolidation represents a transformational step in building a globally competitive, integrated cement and building materials organisation. By bringing Ambuja Cements, ACC and Orient Cement under a single corporate structure, we are strengthening our ability to drive operational excellence, accelerate growth, and deliver sustainable long-term value.” He added that the merger builds on the group’s track record to drive efficiency and productivity, and that a robust balance sheet positions the unified entity to support future growth initiatives.
Will the Ambuja and ACC brands change after the merger?
Ambuja said the proposed amalgamation brings together two of India’s most established cement brands, Ambuja and ACC, under one corporate structure. “The ‘Adani Ambuja Cements’ and ‘Adani ACC’ brands will continue to operate as usual, with their leading product brands in respective markets,” it said.
How did Ambuja build its stake in ACC and Orient?
ACC and Ambuja Cements were acquired by the Adani Group in September 2022 from LafargeHolcim Group. Ambuja currently holds a 50.05 per cent stake in ACC and 72.66 per cent in Orient. Last year, Ambuja announced plans to acquire Orient for Rs 8,100 crore. In April this year, it completed the acquisition of 37.8 per cent promoter stake in Orient and became a promoter.
What happens to assets, liabilities and subsidiaries under the scheme?
With the amalgamation, all assets, including intangible assets such as brands and trademarks, and all liabilities will be transferred to Ambuja. All subsidiaries of ACC will become subsidiaries of Ambuja. Promoter and promoter group holding in Ambuja will stand at 60.94 per cent from 67.65 per cent after approval and completion of all ongoing and proposed schemes of merger of Sanghi, Penna, Orient and ACC.
Why does Ambuja say the structure will be simpler after the merger?
Ambuja said the merger will unlock operational efficiencies, optimise manufacturing and logistics, and enable efficient capital deployment. It said the amalgamation eliminates structural duplication, reduces administrative costs and enables faster decision-making. It added that there will be no specific master service agreement (MSA) required with ACC, Orient, Penna and Sanghi as these subsidiaries will become part of Ambuja Cements.
How did the stocks close on Monday?
On Monday, Ambuja shares on the BSE closed at Rs 540 and its market capitalisation stood at about Rs 1.33 trillion. ACC shares closed at Rs 1,775.80 per share (Rs 33,347.26 crore market capitalisation), while Orient shares closed at Rs 163.85 per share (Rs 3,366.46 crore market capitalisation).