Mint Explainer | Why Adani is folding its cement assets into Ambuja now

MUMBAI: After spending nearly $10 billion over three years to build India’s second-largest cement business, the Adani Group is moving to simplify what has become a sprawling corporate structure.The board of Ambuja Cements Ltd, part of billionaire Gautam Adani’s conglomerate, late on Monday approved a plan to merge ACC Ltd and Orient Cement Ltd into Ambuja. Ambuja currently holds 50.05% in ACC and 72.66% in Orient.

The cement maker estimates that it will take about 12 months to secure approvals from shareholders, creditors and regulators and complete the transactions.Shares of Ambuja Cements rose 2% on Tuesday following news of the merger, while the benchmark Sensex was largely flat.The announcement comes a year after Ambuja’s board approved the amalgamation of listed Sanghi Industries and unlisted Penna Cement into itself last December, signalling a broader push by the group to consolidate assets acquired in quick succession since 2022.Mint breaks down what this merger means for shareholders and how it reshapes Adani’s cement business.For every 100 shares of ACC, investors will receive 328 Ambuja shares. Orient Cement shareholders, meanwhile, will get 33 Ambuja shares for every 100 shares they own.The swap ratio for ACC is broadly in line with its current market price, while the swap ratio for Orient implies an 8% premium over its latest trading price, according to analysts at Antique Stock Broking.Following the allotment of shares, the promoter and promoter group’s holding will fall to 60.94% from 67.65% after the merger of all four companies, including Sanghi Industries and Penna Cement.After the mergers, the Ambuja and ACC brands will continue to operate as usual.