Adani Group's Major Cement Merger Unveiled
In a significant development for India's cement sector, the Adani Group has announced the merger of three of its cement companies: ACC, Orient Cement, and Ambuja Cements. This strategic move will create a unified cement platform, streamlining operations and enhancing market presence. Ambuja Cements has received approval for two separate schemes of amalgamation from the boards of ACC Ltd and Orient Cement Ltd, marking a new chapter in the Indian cement landscape.
Under the proposed merger, Ambuja Cements will issue 328 equity shares of Rs 2 each for every 100 equity shares of ACC, valued at Rs 10 each. Similarly, for Orient Cement, Ambuja will provide 33 equity shares for every 100 equity shares held by shareholders. This consolidation comes after the Adani Group's entry into the cement market in May 2022, acquiring controlling stakes in Ambuja and ACC from Holcim in a landmark $10.5 billion deal.
The merger is expected to simplify the corporate structure, reduce administrative costs, and enhance operational efficiencies. Ambuja Cements stated that this move will facilitate cost efficiencies and margin expansion while also supporting growth metrics. The amalgamation aligns with the strategic plan of increasing cement production capacity from 107 million tonnes per annum (MTPA) to 155 MTPA by FY28, ensuring faster responses to market demands.
Furthermore, the merger aims to eliminate structural duplication and enable quicker decision-making processes. Post-merger, there will be no need for separate management services agreements with ACC and Orient Cement, as they will operate as integral parts of Ambuja Cements.
In addition to operational benefits, the merged entity is set to adopt a consolidated Environmental, Social, and Governance (ESG) framework, promoting renewable energy solutions and sustainable manufacturing practices. Ambuja Cements currently operates with a capacity of 107 MTPA across 24 integrated plants and 22 grinding units, and is investing in renewable energy sources to advance its decarbonisation efforts.
As the merger progresses, it will pave the way for a more agile and competitive cement company capable of meeting the evolving demands of the Indian market while focusing on sustainability and growth.
