By Srijita Chakraborty
Ambuja Cements Ltd, part of billionaire Gautam Adani-led Adani Group, has approved the merger of its subsidiaries ACC Ltd and Orient Cement into itself, signalling a structural reset of the group’s cement business and the creation of a unified “one cement platform” with pan-India scale.
Ambuja Cements’ board on Monday approved the scheme of amalgamation, through which ACC, Orient Cement, Penna Cement, and Sanghi Industries will become an integral part of the firm. After the acquisition, the firm will have a consolidated cement capacity of 107 million tons every year. This will further make the firm one of the largest in the country in terms of the production of cement.
The merger is aimed at unlocking operating leverage through simplified structure, integrated logistics and manufacturing efficiencies, and more efficient capital deployment. “The merger will unlock greater operational efficiencies, optimise manufacturing and logistics, and enable efficient capital deployment, boosting profitability and long-term shareholder returns,” Ambuja Cements said in a statement.
Market reaction was mixed on Tuesday. Orient Cement stocks touched an intraday high of ₹179, up 9.46%, before trading 5.61% higher at ₹172.69. The stocks of Ambuja Cements increased by 1.76% to ₹549.45, whereas those of ACC Ltd declined by 1.21% to ₹1,761.
Experts generally reacted positively to this consolidation but pointed out that the ratios of share swaps seem neutral to minority shareholders of ACC and favorable to minorities of Orient Cement.
Under the proposed scheme, Ambuja will issue new equity shares to shareholders of the merging entities. ACC shareholders will receive 328 equity shares of Ambuja (face value ₹2 each) for every 100 ACC shares held, while Orient Cement shareholders will receive 33 Ambuja shares for every 100 Orient Cement shares. Despite equity dilution, the transaction is expected to remain EPS-accretive for existing Ambuja shareholders.