Ambuja Cements board approves merger with Adani Cementation

Ambuja Cements, a company owned by the Adani Group, has announced that its board has approved the merger of Adani Cementation, which is currently a subsidiary of Adani Enterprises. This merger, which is contingent upon receiving regulatory and shareholder approvals, will result in Adani Cementation becoming a wholly-owned subsidiary of Ambuja Cements through a share swapping process, as reported by Business Standards.

As part of the merger, Adani Enterprises will receive 8.7 million shares of Ambuja Cements. This consolidation of cement capacities within the Adani Group is aimed at improving operational efficiency and enhancing Ambuja Cements' coastal presence. According to the merger scheme, the specified swap ratio is 174 shares of Ambuja Cements for every 1 share of Adani Cementation (ACL).

Strategically, this merger will position Ambuja Cements to leverage sea and rail logistics to serve the high-growth markets of South Gujarat (Dahej) and Mumbai (Raigad), providing a competitive advantage. The Adani Group, led by billionaire Gautam Adani, currently has an installed capacity of 79 million metric tonnes per annum (MTPA). Their ambitious growth plan targets increasing this capacity to 140 MTPA by 2028.

Earlier this month, the group announced the acquisition of Hyderabad-based Penna Cement for Rs 10,422 crore, which will add 14 MTPA to its capacity, bringing it to 93 MTPA. In December of last year, they completed the acquisition of Saurashtra-based Sanghi Industries for Rs 5,185 crore.

The Adani Group entered the cement sector in September 2022 by acquiring controlling stakes in Ambuja Cements from Holcim for USD 6.4 billion (approximately Rs 51,000 crore). Ambuja Cements holds a 51% stake in ACC. Additionally, the group launched a Rs 31,000 crore open offer to acquire an additional 26% stake from public shareholders.