Holcim intends to streamline the ownership structure of its operations in India in order to strengthen the existing platform and create value for all stakeholders. Through intragroup restructuring, Holcim will increase its shareholding in Ambuja Cements Ltd. (“Ambuja”) to 61.39% and Ambuja in turn will acquire Holcim’s 50.01% stake in ACC Ltd. ("ACC"). Both Ambuja and ACC will continue to operate as separate entities with their own brands and go-to-market strategies. However, the restructuring will allow for closer back-end cooperation between the companies as well as simplify the group structure.
The Board of Ambuja and Holcim have agreed that the transaction will be effected through a merger of Holcim India Private Ltd. ("HIPL"), a wholly owned financial holding subsidiary, with Ambuja. HIPL currently directly holds a 9.76% stake in Ambuja and a 50.01% stake in ACC. In a two stage deal, Ambuja will first acquire, through a purchase, a 24% stake in HIPL for a cash consideration of INR 35,000 million (USD ~600 million), followed by a stock merger between HIPL and Ambuja. As part of the merger, Holcim will receive 584 million new equity shares of Ambuja resulting in an increase of its ownership in Ambuja from the current 50.55% to 61.39%. The transaction is subject to Ambuja’s shareholder and regulatory approvals in India.
In addition, Holcim is committing to the Marwar Mundwa expansion project in North-Central India with an overall capacity of 4.5 MTPA. Holcim is also evaluating additional brown and greenfield investment proposals, such as in ACC Tikaria and Ametha, and will continue to look for opportunities to further optimize its Group structure in India.
"This transaction further improves Holcim's holding structure in India, strengthens the platform for future growth and is expected to generate synergy benefits of INR 9,000 million (USD 150 million) per annum. These benefits, which will be realized in a phased manner over two years, will be shared by both companies equally through supply chain, shared services and fixed costs optimization. The transaction is expected to be neutral on Holcim’s EPS in the first full year following the completion of the transaction and accretive thereafter", says CEO Bernard Fontana.
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Holcim is one of the world's leading suppliers of cement and aggregates (crushed stone, gravel and sand), as well as further activities such as ready-mix concrete and asphalt including services. The Group has majority and minority holdings in around 70 countries across all continents.
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