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Ambuja Cements has approved the merger of ACC and Orient Cement into the parent company, creating a unified cement platform with a total capacity of 107 MTPA. The move will integrate ACC, Orient, Penna and Sanghi under one structure, improve operational efficiency, and reduce costs. Share swap ratios for ACC and Orient shareholders have been announced. The consolidation supports Ambuja's expansion roadmap to reach 140 MTPA by FY28 and does not require CCI approval as it is an intra-group merger.
Ambuja Cements Ltd, part of the Gautam Adani-led Adani Group, has moved to consolidate its cement business by merging its key subsidiaries ACC Ltd and Orient Cement into the parent company. The decision, approved by the board of Ambuja Cements, is aimed at creating a single cement platform and strengthening the group's presence as a pan-India cement producer. Advertisement
Following the proposed amalgamation, ACC, Orient Cement, Penna Cement and Sanghi Industries will be fully integrated into Ambuja Cements. This consolidation will result in a combined cement manufacturing capacity of 107 million tonnes per annum (MTPA), marking a major step in streamlining operations across the group.
As part of the approved scheme, Ambuja Cements will issue 328 equity shares with a face value of INR 2 each for every 100 equity shares of ACC having a face value of INR 10 each. Similarly, shareholders of Orient Cement will receive 33 equity shares of Ambuja Cements with a face value of INR 2 each for every 100 equity shares of Orient Cement with a face value of INR 1 each.
The company indicated that the consolidation is expected to improve operational efficiency by optimising manufacturing processes, logistics, and capital deployment. These measures are projected to support future capacity expansion and improve profitability over the long term. The rationalisation of branding, sales promotion expenses, and administrative structures is expected to lift operating margins by at least INR 100 per metric tonne.
Ambuja Cements currently holds 50.05 per cent stake in ACC, 72.66 per cent in Orient Cement acquired from the CK Birla group, 99.94 per cent in Hyderabad-based Penna Industries, and 58.08 per cent in Sanghi Industries. The merger of Penna and Sanghi with Ambuja was cleared by the board in the past year and is presently undergoing statutory approvals.
Post completion of all ongoing and proposed merger schemes involving ACC, Orient, Penna and Sanghi, the promoter and promoter group holding in Ambuja Cements is expected to reduce to 60.94 per cent from 67.65 per cent.
The company clarified that no approval from the Competition Commission of India is required, as the transactions are intra-group mergers. With the subsidiaries becoming integral parts of Ambuja Cements, separate master supply agreements will no longer be needed, allowing smoother sharing of resources such as clinker, cement and raw materials.
Ambuja Cements crossed the 100 MTPA capacity mark in FY25, largely through acquisitions. It is now targeting capacity expansion to 118 MTPA by FY26 and further to 140 MTPA by FY28, mainly through brownfield projects. The appointed date for the merger with Orient Cement has been set as May 1, 2025, while the merger with ACC is slated to take effect from January 1, 2026.
The Adani Group entered the cement sector in September 2022 after acquiring controlling stakes in Ambuja Cements and ACC from Swiss major Holcim for USD 6.4 billion, equivalent to about INR 51,000 crore. Since then, the group has pursued inorganic growth by acquiring regional cement players to rapidly scale up capacity.
Source PTI
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